Spotify UMG deal is good news for all Artists: Read Full Text

A new multi-year deal between Spotify and UMG that includes recorded music and music publishing appears to establish a new precedent in how royalties – particularly those involving income from bundled subscriptions to songwriters – will be calculated.

New Spotify UMG deal is good news for all Artists & Labels: Read Full Text of the Announcement

The Spotify, UMG deal announcement includes the usual verbiage about “collaboration” and “innovation” and furthers UMG’s Streaming 2.0 initiatives which Deezer, Soundcloud and recently Amazon already signed on to.

“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,” said Sir Lucian Grainge, UMG Chairman & CEO.

But it’s this line that has artists and companies outside of UMG most excited: “Artists, songwriters and consumers will benefit from new and evolving offers, new paid subscription tiers, bundling of music and non-music content…”.

Variety has confirmed that the new deal improves the payment structure of Spotify’s music and audiobook bundle which had meant a lower mechanical royalty for songwriters. “… Although the new deal does not completely ameliorate that payment reduction, it does improve it;” ” according to Variety, “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.”

The National Music Publishers Association, which filed a lawsuit to stop the bundled payout change expressed cautious optimism:

“While we do not have details of the agreement beyond what was in the press release, it appears that it increases royalty rates which is good news for the entire industry. A rising tide lifts all boats and this signals that Spotify is coming back to the table after its disastrous attempt to manipulate royalty rates.”

Good news for UMG artists and songwriters appears to be good news for all artists, labels, and songwriters.

Bruce Houghton is the Founder and Editor of Hypebot, a Senior Advisor at Bandsintown, a Berklee College Of Music professor and the founfer of the Skyline Artists Agency

Full Spotify, UMG deal announcement

Universal Music Group (UMG), the world leader in music-based 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 the advancement of artists’ and songwriters’ success.

Sir 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.”

Under the new agreements, UMG and Spotify will collaborate closely to advance the next era of streaming innovation. 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. By deepening audience experiences, driving further engagement and amplifying the connection between artists, songwriters and their fans, the collaboration between these two companies will position the industry for continued subscriber growth and retention.

The new publishing agreement establishes a direct license between Spotify and Universal Music Publishing Group across Spotify’s current product portfolio in the U.S. and several other countries, which reinforces a mutually beneficial relationship for songwriters on the platform.

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.

About Universal Music Group

Universal Music Group exists to shape culture through the power of artistry. UMG is the world leader in music-based entertainment, with a broad array of businesses engaged in recorded music, music publishing, merchandising and audiovisual content. Featuring the most comprehensive catalogue of recordings and songs across every musical genre, UMG identifies and develops artists and produces and distributes the most critically acclaimed and commercially successful music in the world. Committed to artistry, innovation and entrepreneurship, UMG fosters the development of services, platforms and business models in order to broaden artistic and commercial opportunities for our artists and create new experiences for fans. For more information, visit www.universalmusic.com.

About Spotify 

Since its launch in 2008, Spotify has revolutionised music listening. Our move into podcasting brought innovation and a new generation of listeners to the medium. In 2022, we took the next leap, entering the fast-growing audiobook market—continuing to shape the future of audio.

Today, more listeners than ever can discover, manage and enjoy over 100 million tracks, 6.5 million podcast titles, and 350,000 audiobooks a la carte on Spotify. We are the world’s most popular audio streaming subscription service with more than 640 million users, including 252 million subscribers in more than 180 markets.