New Spotify and UMG deal could create pricier ‘superfan’ subscription

Spotify and Universal Music Group have signed a new multi-year agreement that could result in a tiered subscription approach aimed at providing extra perks for “superfans.” The two didn’t announce any specifics, including the number of years the deal lasts, but UMG says it’s consistent with a “Streaming 2.0” vision it presented to investors last year.

UMG chairman and CEO Sir Lucian Grainge called the agreement “precisely the kind of partnership development” the company hoped for when describing Streaming 2.0. That presentation envisioned a “Super-Premium” subscription for superfans that could mean things like early access to music, exclusive deluxe editions, hi-res audio, and artist Q&As. The companies have been rumored to be discussing such a deal for months.

UMG also referenced Streaming 2.0 when it signed an agreement with Amazon Music last month, as World Music Business pointed out when it broke news of the Spotify agreement prior to Sunday’s announcement. 

The deal also “appears” to increase royalty rates, the National Music Publishers Association told Variety. The outlet pointed out yesterday that the NMPA and others had criticized Spotify over changes last year that led to lower mechanical royalty rates for songwriters, spurring an NMPA complaint to the FTC.

Sony Music Publishing also criticized Spotify’s royalty changes, and even considered options to challenge them. It’s not clear if Sony or any other publishers are in talks for similar deals with Spotify, but that could change in light of the UMG deal, which Billboard notes is Spotify’s first direct deal with a music publisher since the Music Modernization Act passed in 2018.