Thursday, July 23, 2020

UMG gets early access to Spotify features with latest deal | Music Ally

By now you’ll have seen the news of Spotify signing a new multi-year licensing deal with Universal Music Group. You may even have seen the mini-controversy around the description of UMG as “music’s most innovative company” in Spotify’s press release, which is putting backs up within rival labels.

As Spotify execs have said before, some of the dealmaking has focused on its plans to develop its ‘two-sided marketplace’ and marketing tools for labels and artist teams: the announcement mentioned “collaboration on new, state-of-the-art marketing campaigns across Spotify’s platform”, and also said that UMG will “deepen its leading role as an early adopter of future products and provide valuable feedback to Spotify’s development team”.

Those rivals, bristling as they are, will be keen to ensure they get equal dibs on trying those future products. Reminder: our recent Music Ally TV Show explored some of Spotify’s new tools and direction on that front.

Unsurprisingly, the announcement did not spill the beans on whether UMG’s new deal ring-fences the label group’s royalties in the face of Spotify’s expansion into podcasts – thought to be another thorny topic in the latest round of renewals.

As for Wall Street’s view of the news: Spotify ended yesterday with a market cap (value) of $53.86bn, up from $51.39bn the day before. That’s just under $2.5bn of extra value, almost exactly the same amount it added on 19 May when announcing its $100m+ deal with podcaster Joe Rogan.

Stuart Dredge


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