Spotify music stars go "premium-only" in Universal deal

05/04/2017

Spotify is to restrict some albums to paying subscribers for first time, as the music streaming service looks to be moving away from its traditional ad-funded content business model.

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New albums from some Universal Music artists will be available only to premium Spotify users for the first two weeks of release, the two companies announced.

Artists on the label, who include Sam Smith, Eminem and Katy Perry, will be able to list new albums as exclusively for premium users for up to two weeks.

It is a break with years of tradition for Spotify, which has typically made the same songs available to both its paying users and those funded by advertising.

Of Spotify's 100 million monthly users, around 50 million pay the monthly charge for an advertising-free service, which costs £9.99 a month in the UK.

The company has famously refused to put songs on the premium tier alone, leading to stand-offs with artists including Taylor Swift.

The streaming service says that artists can choose whether or not windowing applies to their work.

The move, first rumoured in March, sees Spotify abandon its long-held stance that all music should be available to free subscribers, to encourage more people to sign up and then potentially convert them to a paid subscription down the line.

Daniel Ek, chairman and chief executive of Spotify, said: “This partnership is built on a mutual love of music, creating value for artists and delivering for fans. We will be working together to help break new artists and connect new and established artists with a broadening universe of fans in ways that will wow them both.

“We know that not every album by every artist should be released the same way, and we’ve worked hard with UMG to develop a new, flexible release policy,” Ek added.

Singles by Universal Music artists will continue to be available to all users.

Lucian Grainge, chairman and chief executive of Universal Music Group, said: “Today, streaming represents the majority of the business. Our challenge is transforming that upturn into sustainable growth. In a market this dynamic, one evolving more rapidly than ever before, success requires creative and continual re-evaluation of how best to bring artists’ music to fans.”

Spotify’s largest competitors, including Apple Music and Tidal, do not have free tiers though both services allow time-limited free trials.

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