Music streaming service Spotify and Universal Music Group announced a multiyear global license agreement Tuesday that will allow Universal artists the option to release new albums to premium subscribers for two weeks before public distribution.
These paid subscribers will get a first look at the albums while the singles remain available to other listeners who use the free service.
“This partnership is built on a mutual love of music, creating value for artists and delivering for fans,” Spotify Chairman and Chief Executive Daniel Ek said in a statement. “We know that not every album by every artist should be released in the same way, and we’ve worked hard with UM to develop a new, flexible release policy.”
The new option, which began Tuesday, is thought to increase the possibility of similar agreements between Spotify and other major music companies, including Sony BMG and Warner Music Group. Spotify reportedly had been operating without long-term agreements with all of the major labels, including Santa Monica-based Universal, for nearly two years, renewing its existing contracts on a month-to-month basis.
Negotiations between the major labels and the streaming service were reportedly stalled because of Spotify’s large number of free users, and the record labels wanted to encourage as many users as possible to paid tiers. Spotify executives held the position that free listening creates an entry point for acquiring paying customers.
Earlier this year, Spotify announced that the service has more than 50 million paid subscribers.
Contact media and entertainment reporter Diane Haithman at firstname.lastname@example.org. Follow her on Twitter @dhaithman for the latest in L.A. business news.
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