Universal Music Group and Spotify Sign New Multi-Year Agreement for ‘The Next Chapter of Streaming’

New Deal Between UMG and Spotify

Universal Music Group (UMG) and Spotify have revealed a new multi-year agreement set to launch the “next era of streaming innovation” – discover more below.

• Read More: Why Amazon Music Truly Is the Best Value Streaming Service

Yesterday (January 26), UMG and Spotify announced their renewed partnership, originally established in 2015, which is focused on “growth, innovation, and promoting the success of artists and songwriters.”

As a part of the agreement, both consumers and artists will gain access to “new paid subscription tiers, a blend of music and non-musician content, and a more extensive catalog of audio and visual material.” Specific details about the new subscription levels are yet to be disclosed.

Commitment to Artists

With the goal to “advance the next era of streaming innovation,” UMG and Spotify are also renewing their pledge to artist-first principles, establishing a “mutually beneficial relationship for songwriters on the platform.” This endeavor will include a new license directly between Spotify and UMG’s publishing divisions in the US and other nations.

Regarding artist compensation, the two companies “ensure that artists continue to be fairly remunerated for the share of audience engagement they generate and that their streaming royalties remain safeguarded through the use of a fraud detection platform and enforcement systems.”

UMG Chairman and CEO Sir Lucian Grainge expressed in a statement: “When we first shared our vision for the next phase in the evolution of music a few months ago – streaming layer 2.0 – this is precisely the kind of partnership we envisioned. This agreement expands our collaboration with Spotify for both our labels and music publishers, enhancing artist-centric principles to promote greater monetization for artists and songwriters while also enriching product offerings for consumers.”

Broader Context

This new agreement arrives shortly after UMG announced an expanded relationship with Amazon aimed at “exploring new and expanded product opportunities” that will advantage artists and enhance fan experiences. UMG will also collaborate with Amazon as they venture into audio, further innovating in recorded audio, audio and visual programming, and live content.

On the other hand, Spotify has faced recent controversy. CEO Daniel Ek faced backlash in May for remarks regarding the cost of “content creation,” as many users and musicians criticized him for being “out of touch.”

This criticism coincided with reports that Spotify posted profits exceeding €1bn (£860m) after layoffs and subscription price increases. Additionally, the platform has officially demonetized all songs with fewer than 1,000 streams, creating challenges for artists in generating royalties and making it difficult for emerging artists to enter the industry.

More recently, Spotify stirred mixed opinions by hosting a brunch the day before Donald Trump’s inauguration and donating $150,000 (£122,000) toward the official ceremony.

Earlier this month, Björk expressed her belief that Spotify is “probably the worst thing that’s happened to musicians.” This was not her first criticism of the platform; she previously mentioned in 2015 her choice not to release her album “Vulnicura” on Spotify out of “respect.”

“It seems crazy,” she remarked at the time. “Work on something for two or three years and then just, ‘Oh, here it is for free.’ It’s not about money; it’s about respect. Respect for the craft and the amount of work you put into it.”

These comments echo sentiments shared by Anthrax drummer Charlie Benante last November, who described streaming as a realm “where music goes.” He noted, “Subconsciously that might be the reason why we don’t do a record every three years or whatever, because I don’t want to give it away for free. It’s basically theft. This is stealing from the artist – the people who run music streaming sites like Spotify. I don’t subscribe to Spotify. I think that’s where the music goes to die.”