• by Colin Kirkland , January 27, 2025

Spotify and Universal Music Group (UMG) have struck a new multi-year deal focused on what the companies are calling “Streaming 2.0,” the “next stage in the evolution of music” rooted in new paid subscription tiers and an expanded content catalog, as well as artist and user perks.

The new publishing agreement sets up a direct license between Spotify and Universal Music Publishing Group across the streaming platform's current product portfolio in the U.S. and “several other countries.”

The agreement, according to UMG, is also designed to ensure that artists are properly rewarded for the share of audience engagement they drive “and that their streaming royalties remain protected” by Spotify's fraud detection systems.

In the announcement, UMG CEO Sir Lucian Grainge described the deal as “precisely the kind of partnership development we envisioned,” especially with regard to Streaming 2.0, a concept UMG originally teased to investors last year.

The recording company's initial mention of Streaming 2.0 involved “maximizing customer value” by “powering the next era of streaming growth.”

This vision includes unlocking “superfan” monetization via a “Super-Premium” subscription would provide superfans access to exclusive in-app content and experiences, like hi-res audio and artist interviews.

In connection to superfan-targeted offerings, Streaming 2.0 moves UMG’s focus from just focusing on subscriber growth to also prioritizing subscription ARPU (average revenue per user), especially as streaming prices rise.

Per the deal, Billboard notes that Spotify has agreed to improve royalty payments for UMG songwriters.

Although details of this possible update are not known, Spotify is likely “raising the white flag” after the company recently decided to bundle in audiobooks as part of its premium tiers, effectively cutting music publishers' and artists' royalties but about $150 million last year, Billboard estimates.