Spotify and Universal Music Group Join Forces
It’s official: As MBW previously reported, Spotify and Universal Music Group have signed a new multi-year licensing agreement.
Both sides of the deal have now confirmed their new alliance.
And as MBW sources previously nodded… for the first time in history, the agreement includes a direct licensing agreement between Universal Music Publishing Group (UMPG) and Spotify in United States (plus a few other territories).
Statements from Key Executives
Sir Lucian Grange, chairman and CEO of Universal Music Group, stated: “When we first unveiled our vision for the next stage in the evolution of music subscriptions—Streaming 2.0—several months ago, this is exactly the type of partnership development we envisioned. This agreement advances and expands our collaboration with Spotify for both our labels and music publishers, advancing artist-first principles to enhance monetization for artists and songwriters, while also expanding product offerings for consumers.”
Daniel Ek, Spotify’s founder and CEO, commented: “For nearly two decades, Spotify has lived up to its commitment to returning the music industry to growth by ensuring that every new year we provide record payouts to artists and songwriters. This partnership ensures we can continue to deliver on that promise, confident that continued innovation is key to making paid music subscriptions even more attractive to a wider audience of fans around the world.”
Current Developments and Changes
Behind the scenes, controversy continues over the proposal put forward by Sources of the BIE in our previous story – that the new agreement essentially eliminates the controversial “package” discount rate that applied to US royalty payments from Spotify to UMPG from the 1st quarter of 2024.
Here is our understanding of the current state of affairs:
- Thanks to a new direct deal with UMPG, royalties paid to a publishing company and its songwriters in the United States from Spotify will change;
- Our sources claim that in terms of royalty amounts paid from Spotify to UMPG, the effect of the discount associated with the package for the last year will be effectively canceled, resulting in increased payments to UMPG and its songwriters;
- However, within the framework of the private agreement between UMPG and Spotify, there remains a value distinction between a user of music and audiobooks and a user of music only.
In response to our story earlier, Spotify representatives stated: “Spotify retains its stake, but through this direct deal (with UMPG), it has evolved to provide broader rights, including different economic treatment for music and non-music content.”
New official press release from UMG and Spotify regarding their new deal is posted in full below for your viewing pleasure.
UNIVERSAL MUSIC GROUP AND SPOTIFY Strike NEW MULTI-YEAR AGREEMENT
Expanded global collaboration in music recordings and music publishing
Companies will accelerate product innovation, advance music monetization and deepen engagement between artists and fans
SANTA MONICA and STOCKHOLM, January 27, 2025 – Universal Music Group (UMG), a global leader in music entertainment, and Spotify, the world’s most popular audio streaming subscription service, today announced new multi-year agreements for Recorded Music and Music Publishing focused on growth, innovation, and promoting the success of artists and songwriters.
Sir Lucian Grainge, Chairman and CEO of Universal Music Group, stated: “When we first unveiled our vision for the next stage in the evolution of music subscriptions – Streaming 2.0 – a few months ago, this is exactly the type of partnership development we envisioned. This agreement furthers and expands our collaboration with Spotify for both our labels and music publishers, advancing artist-centric principles to enhance monetization for artists and songwriters, and expanding product offerings for consumers.”
Daniel Ek, Founder and CEO of Spotify, shared: “For nearly two decades, Spotify has lived up to its commitment to returning the music industry to growth by ensuring that every new year we provide record payouts to artists and songwriters. This partnership ensures we can continue to deliver on that promise, confident that continued innovation is key to making paid music subscriptions even more attractive to a wider audience of fans around the world.”
Under the new agreements, UMG and Spotify will work closely to advance the next era of streaming innovation. Artists, songwriters, and consumers will benefit from new and evolving offerings, new paid subscription tiers, a mix of music and non-music content, and a richer catalog of audio and visual content. By deepening the audience experience, furthering engagement and strengthening connections between artists, songwriters, and their fans, the collaboration between these two companies will enable the industry to continue growth and subscriber retention.
The new publishing agreement establishes a direct license between Spotify and Universal Music Publishing Group for Spotify’s current portfolio of products in the US and select other countries, strengthening a mutually beneficial relationship for songwriters on the platform.
The new agreements also reaffirm the companies’ commitment to artist-first principles, ensuring that artists continue to be properly compensated for the share of audience engagement they generate and that their streaming royalties remain protected through the use of fraud detection and enforcement platform systems.
