Universal Music Groupthe world’s largest music company, and SpotifyThe world’s largest paid streaming service, announced on Sunday new multi -year agreements for recorded music and music publishing “focused on growth, innovation and promotion of artists and songwriters’ successes”, according to the joint announcement. It also marks the first direct license between Spotify and a major publisher for several years.
Although the Terms and Conditions of the Agreement were not announced, sources confirms Amount that the deal improves at least part of the payment structure for Spotify’s controversial “Bundling” agreement for music and audio booksannounced last year, which meant a lower mechanical royalty for songwriters and was so strongly condemned by the rights holders that the National Music Publisers Association submitted a legal complaint against the streaming giant in June.
Sources tell Amount That although the new deal does not fully improve this reduction in payment, it improves it; Given that Universal Music Publishing’s CEO Jody Gerson was one of the most loud votes that criticized the package, the conditions must represent at least some significant improvements.
A Spotify representative said in a separate statement, “Spotify retains its package, but with this direct agreement (with UMPG) it has been developed to take into account broader rights, including another economic treatment of music and non-music content.” The unusual time of the announcement Sunday afternoon was due to the news leaking to Music stores all over the worldwho was the first to report the deal.
Although much of the wording in the announcement is in bland general, it is noted that “artists, songwriters and consumers will benefit from new and developing offers, new paid subscription levels, packaging of music and non-music content and a richer sound and visual content catalog” , and adds that “the collaboration between these two companies will position the industry for continued growth and retention of subscribers.” It concludes by noting that “The new agreements also renew the companies’ commitment to artist -centered principles, which ensures that artists continue to be properly rewarded for the proportion of audience engagements they operate and that their royalms for streaming remain protected by the platform’s application of its system for detection and the maintenance of fraud. ”
Although there is no doubt that streaming, and in particular Spotify, restored the music industry to financial health after 15 years due to illegal download, its payments to musicians and especially songwriters are only a fraction of what they earn on the sale of physical product Like vinyl and CDs. Streaming services pay approximately between $ 0.003 and $ 0.005 per stream, which is paid directly to the rights holders (usually labels and publishers) who then pay the artist or songwriter and other stakeholders.
Not surprisingly, these small payments mean that only the most top -streamed artists – usually superstars – can earn significant income from streaming, which is why musicians have come to rely on tours, sales of goods and trademark partnership for their livelihood.
But even that model has fallen in recent years, as the post -pandemic glow has disappeared from the live music industry and in a tougher economy, many tours, even by big stars, have met lower ticket sales than hoped – a truly existential crisis, as it leaves many musicians In principle, no way to support themselves while managers at music companies and special streaming services are the foremost beneficiaries – Forbes estimates Spotify CEO and co -founder Daniel Ek’s net value of $ 7.4 billion.
Last week, singer-songwriter Bjork said “Spotify is probably the worst It has happened to musicians ”, although her comment on closer examination is more precisely focused on the streaming economy in general.
About the new deal said Lucian Grainge, Chairman of the Board and CEO, Universal Music Group: “When we first presented our vision for the next step in the development of music subscription several months ago – Streaming 2.0 – it is precisely this type of partnership development that we imagined . This agreement promotes and broadens the collaboration with Spotify for both our record companies and music publishers, and promotes artist -centered principles to drive greater revenue generation for artists and songwriters, as well as improve the product range for consumers. “
Daniel Ek, Spotify’s founder and CEO, said: “For almost two decades, Spotify has completed its commitment to restore the music industry to growth, which ensures that we deliver record payments in favor of artists and songwriters every new year. This partnership ensures that we can continue to continue Fulfilling this promise by embracing the certainty that constant innovation is the key to making paid music subscriptions even more attractive to a wider audience of fans around the world. ”
A representative of NMPA said that the organization has no comments.
