nsucurrent.com April 25, 2018

Spotify Premium users will get some albums two weeks before free users

05 April 2017, 01:47 | Shelley Chandler

Spotify Inks Deal with Universal Music Group, Moves Closer to IPO

Headphones are seen in front of a logo of online music streaming service Spotify in this illustration

Universal Music boss Sir Lucian Grainge said: "Today, streaming represents the majority of the business".

Universal artists including Taylor Swift will be able to offer new albums to paid subscribers only for two weeks, with singles available on the free service, the companies said in a statement on Tuesday. According to the Recording Industry Association of America, music creators earn $1 for every 1,000 streams of a song on YouTube but earn at least $7 for every 1,000 streams on Spotify or Apple Music.

The music streaming service has signed a new global licence agreement with Universal Music Group.

As part of the deal, Spotify has agreed to allow new albums from Universal artists to be restricted to its premium service for up to two weeks.

Negotiations between the labels and the streaming service were stuck because of Spotify's large number of free users. Swift ultimately favored Apple Music, while Drake released an album as an Apple Music exclusive. By adopting windowing for big releases, Spotify is adding a major incentive for free users to upgrade - though it could also send listeners elsewhere, like YouTube, which has an ad-supported tier as well, or back to piracy. "I congratulate Daniel on Spotify's continued growth and innovation, and I look forward to working together with him and his team to develop exciting new ways to connect artists and fans around the world".

"Our challenge is transforming that upturn into sustainable growth", Grainge said. And that will give Spotify a big boost as it prepares to go public in 2018. Spotify, which now boasts more than 50 million paid subscribers, argued that its free service helps bring in new customers that are eventually converted to its paid service. Singles will remain available to everyone.

"Working hand-in-hand with these digital services brought us the industry's first real growth in almost two decades".

Under the current deals, the music giants have reaped 55 percent of the Spotify-revenues, while artists have cut out another 10 to 12 percent. Now with various streaming services offerings millions of songs at the touch of a button, the motivation to actually pay for music has nearly completely diminished.

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