It’s official: as MBW reported earlier, Spotify and Universal Music Group have inked a new multi-year licensing agreement.
Both sides of the deal have now confirmed their fresh alliance.
And, as MBW’s sources nodded to earlier… it includes a surprise direct licensing agreement between Universal Music Publishing Group (UMPG) and Spotify in the United States (plus multiple other territories).
Behind the scenes, there remains some debate over the suggestion – put forward from MBW sources in our earlier story – that the new deal essentially ends the controversial ‘bundle’-related discount rate that has been applied to US royalty payouts from Spotify to UMPG since Q1 2024.
Here’s our understanding as things stand:
• Via the new direct deal with UMPG, the royalties paid to the publishing company and its songwriters in the US from Spotify will change;
• Our sources maintain that, in terms of royalty sums paid by Spotify to UMPG, the effect of the bundle-related discount over the past year will effectively be nullified going forward, and payouts to UMPG and its songwriters will rise;
• However, within the private UMPG and Spotify agreement, there remains a value differentiation between a music-plus-audiobooks user vs. a music-only user.
On this matter, in reaction to our story earlier, a Spotify spokesperson said: “Spotify maintains its bundle, but with this direct deal [with UMPG], it has evolved to account for broader rights, including a different economic treatment for music and non-music content.”
