Universal Music Groupthe world’s largest music company, and SpotifyThe world’s largest streaming service, announced on Sunday new, multi -year agreements for recorded music and music that publishes “focused on growth, innovation and progress of artists and songwriters’ success”, according to the joint announcement. It also marks the first direct license between Spotify and a large publisher for several years.
While the terms of the deal were not announced, sources confirms Amount that the deal improves at least part of the payment structure for Spotify’s controversial music -audio book “Bundling” agreementannounced last year, which meant a lower mechanical royalty for songwriters and was so sentenced by rights holders that the National Music Publisers Association submitted a legal complaint against the streaming giant in June.
Sources say Amount That although the new business does not fully improve that reduction in payment, it improves it; Given that the CEO of Universal Music Publication Jody Gerson was one of the highest votes that criticized the bundle, the terms must represent at least some significant improvements.
A Spotify representative said in a separate statement, “Spotify maintains its bundle, but with this direct business (with UMPG) it has been developed to report broader rights, including another financial treatment for music and non-music content.” The unusual time of Sunday-afternoon for the announcement was due to the news leaking to Music activities all over the worldwhich would first report the deal.
While much of the wording in the announcement is in bland generalities, it notes that “artists, songwriters and consumers will benefit from new and developing offers, new paid subscription levels, bundling of music and non-music content and a richer sound and sound and visual content Catalog “, and adds that” the collaboration between these two companies will position the industry for continued subscriber growth and stock. “It concludes by noting that” the new agreements also renew the companies’ commitment to artist -centric principles, and ensure that artists continue to be correctly rewarded for the proportion of the audience’s commitment that they drive and that their streaming royalties remain protected by the platform’s application of its fraud discovery enforcement system.
Although this is a small issue such as streaming and Spotify in particular, the music industry returned to financial health after a 15-year-old tail 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 as vinyl and CDs. Streaming services pay approximately $ 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 lean payments mean that only the very top-controlled artists-most of the time superstar can make significant income from streaming, which is why musicians have come to rely on tournament, sales and brand partnerships for their livelihood.
But even that model has faltered in recent years, as the post-pandemic glow has faded from the live music industry and in a tougher economy, many tours, even by big stars, have met lower ticket sales than hoped-a really existential crisis, Since it leaves many musicians in basically no way to serve their lives, while managers at music companies and especially streaming services are the leading beneficiaries – Forbes appreciates Spotify CEO and founder Daniel Ek’s net value at $ 7.4 billion.
Last week, singer writer Bjork said “Spotify is probably the worst Musicians have happened, “although her comment on closer examination is more accurate to the streaming economy in general.
By New Deal said Lucian Grainge, chairman and CEO, Universal Music Group: “When we first presented our vision for the next step in the development of music subscriptions several months ago – Streaming 2.0 – this is precisely the type of partnership development we represented. This agreement promotes and broadens the collaboration with Spotify for both our labels and music publishers, which promote artist -centric principles to drive greater revenue generation for artists and songwriters, and improve the product range for consumers. “
Daniel Ek, Spotify’s founder and CEO, said: “For almost two decades, Spotify has done well on its commitment to return 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 deliver this promise by embracing the security that constant innovation is the key to making paid music subscriptions even more attractive to a wider audience of fans around the world. ”
A rope for NMPA said the organization has no comment.
