Universal Music Group, the world’s largest music company, and Spotify, the world’s largest paid streaming service, announced on Sunday new, multi-year agreements for recorded music and music publishing “focused on growth, innovation and the advancement of artists’ and songwriters’ success,” according to the joint announcement. It also marks the first direct license between Spotify and a major publisher in several years.
While terms of the deal were not announced, sources confirm to Variety that the deal improves at least some of the payment structure of Spotify’s controversial music-audiobooks “bundling” deal, announced last year, which meant a lower mechanical royalty for songwriters and was so roundly condemned by rights-holders that the National Music Publishers Association filed a legal complaint against the streaming giant in June.
Sources tell Variety that although the new deal does not completely ameliorate that payment reduction, it does improve it; considering that Universal Music Publishing CEO Jody Gerson was one of the loudest voices criticizing the bundle, the terms must represent at least some significant improvements.
While much of the wording in the announcement is in bland generalities, it does note that “Artists, songwriters and consumers will benefit from new and evolving offers, new paid subscription tiers, bundling of music and non-music content, and a richer audio and visual content catalog,” adding that “the collaboration between these two companies will position the industry for continued subscriber growth and retention.” It concludes by noting that “The new agreements also renew the companies’ commitment to artist-centric principles, ensuring that artists continue to be properly rewarded for the share of audience engagement that they drive and that their streaming royalties remain protected through the platform’s application of its fraud detection and enforcement systems.”
The obnoxious Sunday-afternoon timing of the announcement was due to the news leaking to Music Business Worldwide, which was first to report the deal.
Lucian Grainge, Chairman & CEO, Universal Music Group said, “When we first presented our vision for the next stage in the evolution of music subscription several months ago — Streaming 2.0 — this is precisely the kind of partnership development we envisioned. This agreement furthers and broadens the collaboration with Spotify for both our labels and music publisher, advancing artist-centric principles to drive greater monetization for artists and songwriters, as well as enhancing product offerings for consumers.”
Daniel Ek, Spotify’s Founder and CEO, said, “For nearly two decades, Spotify has made good on its commitment to return the music industry to growth, ensuring that we deliver record payouts to the benefit of artists and songwriters each new year. This partnership ensures we can continue to deliver on this promise by embracing the certainty that constant innovation is key to making paid music subscriptions even more attractive to a broader audience of fans around the world.”
A rep for NMPA said the organization has no comment.
