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It has been rumored for a while, but Spotify has finally confirmed that it will allow music labels and artists to limit some albums to Spotify’s Premium subscription service.
As part of a new multi-year licensing arrangement with Universal Music Group (UMG), some new albums can be restricted to the $10 monthly subscription plan for a period of two weeks, though specific singles may still be made available across the free tier.
The agreement will also involve Spotify and UMG collaborating around marketing, and UMG will be given “unprecedented access to data” to help artists connect with their fans.
“This partnership is built on a mutual love of music, creating value for artists, and delivering for fans,” said Spotify cofounder and CEO Daniel Ek, in a press release. “We will be working together to help break new artists and connect new and established artists with a broadening universe of fans in ways that will wow them both. We know that not every album by every artist should be released the same way, and we’ve worked hard with UMG to develop a new, flexible release policy.”
Spotify passed the 50 million paid subscriber mark last month, and reports surfaced shortly after that it was about to limit some music to paid subscribers. Up until now, the monthly subscription has offered a number of perks compared to the free incarnation, including no ads, offline access, and on-demand access to any Spotify song on mobile. But the company was catapulted into the headlines a few years back when Taylor Swift removed her music from the service after Spotify refused to make her music only available to paid users. Spotify has always maintained that the best way to sign up paying users is to let them access the service for free (with some limitations), after which Spotify can put in the spadework to shoehorn them into the paid tier.
Now, ahead of the company’s IPO, which is looking increasingly likely to be next year, Spotify has finally given in to industry pressure by allowing some controls over how albums are released on Spotify. Previous reports had suggested that Spotify was seeking to lower its royalty payments in return, but when pressed by VentureBeat, the company wouldn’t reveal whether that is the case. That we were given a “no comment” rather than a flat-out denial would suggest that lower royalties was indeed part of its latest agreement with UMG — but for now, we can’t know for sure.
As UMG is one of the “big three” record labels, this is a major development in the music-streaming realm, and it’s likely that similar deals will be announced with the likes of Sony and Warner in the future.
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