Spotify, UMG Announce Multi-Year License Agreement

Spotify, the world’s most popular audio streaming subscription service, and Universal Music Group, the world leader in music-based entertainment, today announced a new, multi-year global license agreement that further aligns the companies’ efforts to foster groundbreaking new features providing value for artists and great experiences for music fans.

With this new agreement, the companies advance their industry-leading partnership, reflecting a shared commitment to music’s continued growth, deeper music discovery experiences and collaboration on new, state-of-the-art marketing campaigns across Spotify’s platform. Additionally, as music’s most innovative company and one of Spotify’s earliest supporters, UMG will deepen its leading role as an early adopter of future products and provide valuable feedback to Spotify’s development team.

Daniel Ek, Chairman & CEO of Spotify, said, “From their early experimentation with Marquee, to testing new experiences like Canvas, Universal Music Group has been an important partner in helping to shape the development of our marketing tools. With today’s announcement, we will expand on this level of early stage innovation and further strengthen our partnership and shared vision for helping advance artists at all stages of their careers. We've said all along, the goal of our Marketplace strategy is to harness Spotify’s ability to connect artists with fans on a scale that has never before existed and bring new opportunities to the industry. Together, we look forward to reinvesting in and building new tools and offerings for artists around the world.”

Sir Lucian Grainge, Chairman and CEO of Universal Music Group, said, “With this agreement, UMG and Spotify are more aligned than ever in our commitment to ensuring the entire music ecosystem thrives and reaches new audiences around the globe. Given our commitment to innovation and early adoption of music technologies, and Spotify’s leadership in the development of forward-thinking tools, our new partnership will provide our artists with new and powerful opportunities to connect with fans on Spotify’s growing platform. Working together, our teams will expand and accelerate our collaborative efforts to deliver artist-focused initiatives, strategic marketing campaigns and new offerings to provide exciting new experiences for fans worldwide.”

The Wall Street Journal reports the latest deal with Universal signals a deeper relationship between the two companies. The label giant, which holds some 40% market share in recorded music in the U.S., will serve as a testing and development partner for the tools, services and marketing products Spotify hopes artists and labels—including Universal—will pay for.

“We’re joined at the hip and speaking pretty much daily with each other,” said Mr. Ek. “This is all about driving discovery and connecting more artists and fans on a scale that’s never happened before.”

“Our plan is to be chief experimental officer,” said Universal CEO Lucian Grainge. “We’ll take this experimentation and really drive it forward now with what we know about consumers and what we know about each other’s data.”

In an early iteration of such “two-sided marketplace” products, Spotify late last year introduced the ability for labels to pay to deliver push notifications promoting new music from artists whose previous releases a given user has listened to or added to his or her Spotify library. Universal was an early adopter of the sponsored recommendations, which are labeled as such and dubbed “Marquee.”

Universal label Republic Records’ campaign for R&B singer the Weeknd’s “After Hours” at the end of March saw the highest response rate from listeners of a campaign to date and the album hit No. 1 on the Billboard 200 albums chart. Spotify says its data indicate that the feature prompts higher levels of listening in both the short- and long term.