Spotify and the Universal Music Group have finalized a new, multi-year global license agreement that will give UMG artists access to a “flexible release policy”. This new agreement will give the artists the ability to “window” new albums for paid users only for a two week period which marks the end of Spotify’s policy of giving both free and premium subscribers access to complete albums on their release dates.
Spotify’s CEO Daniel Ek has said the new partnership was built on a “mutual love of music” and that the agreement is a part of an initiative to create more value for artists.
“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,” said Ek in a statement. “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.”
Subscribers won’t have to wait long to see the effects of the agreement as Ek said the flexible release policy for UMG begins immediately. Upcoming albums from the label’s artists will be able to choose to keep their albums available only for premium subscribers for two weeks before they are released across the platform. This will give paid subscribers the chance to hear the whole albums before unpaid ones though a ny singles will continue to be available across all tiers.
Sir Lucian Grainge, chairman and CEO of Universal Music Group has said of the agreement:
“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 re-imagined 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.”
It hasn’t been announced if Spotify will be offering any other similar licensing deals with the other major labels, but the agreements are seen as a crucial step for Spotify to clear the path for an IPO in 2018. The new agreement is seen to be a push by Spotify to give incentive for free subscribers to upgrade their services to a premium subscription.
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