Universal Music Group, Spotify Sign Multi-Year Deal to Help Artists Succeed
By Movieguide® Contributor
Universal Music Group and Spotify announced this week they’ve reached an agreement for a multi-year deal that improves payment structure.
The deal for music publishing and record music is “focused on growth, innovation, and the advancement of artists’ and songwriters’ success,” the announcement said.
This is the first direct agreement between Spotify and a major publisher in years. The companies have not announced the terms of the deals. However, sources told Variety that the deal improves some of the payment structure of Spotify’s music-audiobooks bundling deal. The bundling deal, announced last year, gave lower royalties to songwriters.
Last year, Billboard wrote a report about Spotify, noting that the company will pay songwriters $150 million less in 2025 than in 2024, thanks to the bundle. The bundle allows premium subscribers 15 audiobook hours per month. Because Spotify bundled books and songs, it claimed it could give songwriters a discounted rate for premium streams.
The bundle deal is criticized by many. The National Music Publishers Association even filed a legal complaint against Spotify last summer.
“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,” a Spotify representative said.
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Per The Hollywood Reporter, the new deal is part of UMG’s Streaming 2.0 plan, which puts weight on amplified listener value through subscriptions and special content.
“The announcement of a deal between Spotify and UMPG bodes well for the industry and is a clear sign that Spotify felt the backlash to its bundling scheme,” said National Music Publishers Assn. president/CEO David Israelite. “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…Songwriters should not be treated as the enemy, but should instead be treated as valued business partners.”
Some of the announcement reads:
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. The collaboration between these two companies will position the industry for continued subscriber growth and retention…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.
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