Spotify and UMG unveil landmark deal to boost music streaming monetization
New multi-year agreement introduces premium tiers and improved royalties while expanding digital music experiences.

Universal Music Group (UMG) and Spotify have reached a multi-year agreement that aims to improve music monetization and expand fan experiences through new subscription tiers, according to an announcement made on January 26, 2025.
The deal represents a significant shift in the streaming landscape, building on UMG's vision of "Streaming 2.0" presented to investors last year. The agreement encompasses both recorded music and music publishing rights, marking Spotify's first direct publishing deal since the Music Modernization Act of 2018.
According to data from UMG's recent Capital Markets Day presentation, the global recorded music industry has experienced substantial growth driven by streaming, reaching $28.6 billion in 2023. However, music streaming remains significantly undermonetized compared to other forms of entertainment, with subscription music costing approximately $5 per consumption hour versus $45 for theatrical movies.
The new partnership introduces several key developments. First, it establishes a direct license between Spotify and Universal Music Publishing Group (UMPG) across multiple territories. Industry sources indicate this arrangement improves the payment structure for music rights holders, addressing concerns raised by publishers regarding Spotify's previous audiobook bundling model.
Sir Lucian Grainge, UMG's Chairman and CEO, emphasized the agreement's alignment with the company's strategic vision: "When we first presented our vision for the next stage in the evolution of music subscription several months ago—Streaming 2.0—this is precisely the kind of partnership development we envisioned."
The deal also paves the way for new premium subscription tiers targeting dedicated music fans. According to UMG's market research, approximately 20% of existing subscribers have expressed willingness to pay extra for enhanced features. These could include early access to new music, priority access to deluxe editions, and improved audio quality.
Daniel Ek, Spotify's Founder and CEO, highlighted the platform's track record: "For nearly two decades, Spotify has made good on its commitment to return the music industry to growth, ensuring that we deliver record payouts to the benefit of artists and songwriters each new year."
National Music Publishers Association president David Israelite welcomed the development, stating the deal "appears to increase royalty rates" and signals "Spotify is coming back to the table after its disastrous attempt to manipulate royalty rates."
The agreement arrives as UMG reports strong financial performance, with revenue reaching €11.1 billion in 2023 and adjusted EBITDA of €2.4 billion. The company projects continued growth through 2028, driven by both subscriber expansion and improved monetization strategies.
Under the new partnership, both companies will collaborate on developing enhanced digital experiences and innovative content formats. The deal also reinforces fraud detection and enforcement systems to protect artists' streaming royalties.
This agreement follows UMG's recent partnership with Amazon Music and reflects the music industry's broader push toward more sustainable economic models for artists and rights holders in the streaming era.