The biggest music business story so far this year is Universal Music Group‘s very public falling out with social video app TikTok.
But there’s another widely used app that has a very different relationship with UMG, the world’s biggest music rightsholder. As of today (March 28), that relationship will be getting much closer.
UMG has just announced an expansion of what it calls its “strategic relationship” with Spotify.
According to the companies, they will collaborate on “new promotional and social tools” for UMG artists on the Spotify platform.
Additionally, a new agreement with Universal Music Publishing Group (UMPG) will enable Spotify to distribute music videos in the US, which UMG said will enable “deeper experiences with the songs, the artists, and the songwriters”.
Spotify revealed earlier this month that it is launching full-length music videos in beta for Spotify Premium users across 11 markets, but the US was not included in that list.
It appears that US-based Spotify users will also be getting music videos after all, as a result of Spotify and UMPG’s new deal. (Universal Music Publishing controls a catalog of approximately 4 million songs).
Universal’s expanded deal with Spotify – including those video and ‘social tools’ components – comes two months after TikTok lost UMG’s catalog due to a licensing dispute.
Universal Music Group has refused to renew its licensing deal with TikTok for a number of reasons, including the app’s compensation for artists and songwriters, and UMG’s concerns about TikTok’s use of AI.
On March 1, Universal Music Publishing’s catalog of ~4 million songs became unlicensed for use on TikTok, joining UMG’s portfolio of ~3 million recordings, whose license on TikTok expired (so far without renewal) on February 1.
Regarding the new Spotify deal, UMG Chairman & CEO Sir Lucian Grainge said: “We’re excited to broaden our relationship with Spotify through the introduction of new content offerings and collaborations that will bring deeper ‘social music’ experiences to the platform.”
He added: “We’re always striving to expand opportunities for UMG artists and songwriters to elevate engagement with their fans, especially in the introduction of new music and artist-centric initiatives.”
“We’re always striving to expand opportunities for UMG artists and songwriters to elevate engagement with their fans, especially in the introduction of new music and artist-centric initiatives.”
Sir Lucian Grainge
On a Q2 earnings call in July last year, Sir Lucian Grainge revealed that UMG had signed a “newly expanded agreement” with Spotify. Said agreement, MBW learned, amounted to a fresh multi-year (believed to be 3-year) global licensing deal for UMG’s content.
On the same earnings call, Sir Lucian Grainge, and Michael Nash, EVP of Universal Music Group, revealed that Spotify was embracing elements of Universal Music Group’s ‘artist-centric’ model for its new royalty payout model, which is/was set to be introduced this quarter (Q1 2024).
In his statement on Thursday, Sir Lucian Grainge added: “Spotify has been a committed partner in creating tools that help maximize attribution and fair pay for artists and songwriters, and this demonstrates that win-win partnerships between music companies and platforms create an environment where innovation, artist compensation and next-generation fan experiences can coexist and move the industry forward.”
According to the two companies’ announcement on Thursday, under the new agreement, Spotify will make available a series of new promotional and social features “that will help artists drive interaction and generate excitement around new releases”.
To start, UMG artists will have the ability to share teasers of upcoming music on Spotify to increase fan engagement and pre-save activity before a new release.
The companies say that they will continue to explore additional features that “allow fans to discover artists and propel virality of new releases”.
They also said on Thursday that they will share more details about these new tools and how artists, songwriters and fans can leverage them in the near future.
“The forthcoming features will put more power in the hands of artists and their teams to help them authentically express themselves, efficiently promote their work, and better monetize their art.”
Daniel Ek, Spotify
Daniel Ek, Spotify Founder & CEO, added: “UMG has consistently been a progressive partner on behalf of their artists and songwriters, contributing to our product development efforts of experimental tools and adopting them early to help artists stand out.
“The forthcoming features will put more power in the hands of artists and their teams to help them authentically express themselves, efficiently promote their work, and better monetize their art.”Music Business Worldwide
