Spotify is changing its approach to windowing releases on premium after finally signing a new, multi-year global license agreement with Universal Music Group (UMG).
Under the deal, Universal artists will be able to release new albums on premium only for two weeks - a long-term goal for many artists and labels alike. Taylor Swift previously removed all her music from Spotify in protest at the streaming services formerly inflexible approach.
In a joint statement, the two companies claimed the deal would "advance their partnership to ensure that streaming realises its full transformational potential for artists, labels and fans by delivering a comprehensive range of music experiences". This will include providing more flexibility for new releases, and collaborating on innovative marketing campaigns across Spotify’s platform. The new agreement will also provide UMG with unprecedented access to data, creating the foundation for new tools for artists and labels to expand, engage and build deeper connections with their fans.
Speaking about the announcement, Daniel Ek, chairman and CEO of Spotify, said: “This partnership is built on a mutual love of music, creating value for artists and delivering for fans. We will be working together to help break new artists and connect new and established artists with a broadening universe of fans in ways that will wow them both. We know that not every album by every artist should be released the same way, and we’ve worked hard with UMG to develop a new, flexible release policy.
"Starting today, Universal artists can choose to release new albums on premium only for two weeks, offering subscribers an earlier chance to explore the complete creative work, while the singles are available across Spotify for all our listeners to enjoy. I want to thank Sir Lucian for his leadership in everything we have done so far and in everything that we will do together to deliver on the promise of the new music economy for all the people who make music and all the people who love it.”
Sir Lucian Grainge, chairman and CEO of Universal Music Group, added: “Eight years ago, when streaming was a welcome but small source of revenue, UMG embraced partners like Spotify as a way to help return music to a vibrant future benefitting the entire ecosystem. Working hand in hand with these digital services brought us the industry’s first real growth in nearly two decades.
"Today, streaming represents the majority of the business. Our challenge is transforming that upturn into sustainable growth. In a market this dynamic, one evolving more rapidly than ever before, success requires creative and continual re-evaluation of how best to bring artists’ music to fans. At UMG, we’ve not only reimagined distribution models and technologies, but entire business models. The only constants must be great music and fair compensation for artists and creators. To that end, the long-term success of Spotify, and others like it, is essential to the ecosystem’s enduring health. I congratulate Daniel on Spotify’s continued growth and innovation, and I look forward to working together with him and his team to develop exciting new ways to connect artists and fans around the world.”
Spotify is likely to have secured a lower payment rate from Universal in return for the deal, but even so it represents a major climbdown for the streaming service, which had previously insisted all releases should appear on both free and premium tiers.
When speaking to Music Week last year about whether Spotify discriminates against artists that do streaming exclusives elsewhere when it comes to playlists, George Ergatoudis commented: "We took a view that we are going to work with people that want to work with us and that’s the reality. If you want to partner with us, be on a project with us, be with us from the beginning – that’s where the benefits are going to be. So obviously we are favouring the labels, artists and managers that want to work with us."
Ergatoudis also predicted that Taylor Swift would return to the service. That certainly seems a lot more likely now...