It’s official: as MBW reported earlier, Spotify and Universal Music Group have inked a new multi-year licensing agreement.
Both sides of the deal have now confirmed their fresh alliance.
And, as MBW’s sources nodded to earlier… it includes a surprise direct licensing agreement between Universal Music Publishing Group (UMPG) and Spotify in the United States (plus multiple other territories).
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—Steaming 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.”
Behind the scenes, there remains some debate over the suggestion – put forward from MBW sources in our earlier story – that the new deal essentially ends the controversial ‘bundle’-related discount rate that has been applied to US royalty payouts from Spotify to UMPG since Q1 2024.
Here’s our understanding as things stand:
- Via the new direct deal with UMPG, the royalties paid to the publishing company and its songwriters in the US from Spotify will change;
- Our sources maintain that, in terms of royalty sums paid by Spotify to UMPG, the effect of the bundle-related discount over the past year will effectively be nullified going forward, and payouts to UMPG and its songwriters will rise;
- However, within the private UMPG and Spotify agreement, there remains a value differentiation between a music-plus-audiobooks user vs. a music-only user.
On this matter, in reaction to our story earlier, a Spotify spokesperson said: “Spotify maintains its bundle, but with this direct deal [with UMPG], it has evolved to account for broader rights, including a different economic treatment for music and non-music content.”
The new official press release from UMG and Spotify about their fresh deal is published below in full for your delectation.
UNIVERSAL MUSIC GROUP AND SPOTIFY STRIKE NEW MULTI-YEAR AGREEMENT
Expanded Global Relationship For Recorded Music and Music Publishing
Companies to Accelerate Product Innovation, Advance Music Monetization and Deepen Engagement Between Artists and Fans
SANTA MONICA and STOCKHOLM, 27 January 2025 – 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—Steaming 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 platforms’ application of its fraud detection and enforcement systems.Music Business Worldwide
