Spotify has announced that they made a new agreement with the Universal Music Group (UMG), one of the world’s three biggest music-based entertainments in the world. . Spotify is a music, podcast and video streaming service, founded in 2006 in Stockholm. Official launch date was 7 October 2008. It provides digital rights management protected content from record labels and media companies. Spotify is a free service which provides the use of basic features freely with advertisements. Additional features, including improved streaming quality and offline music downloads, are given via paid subscriptions.
The CEO of Spotify, Daniel Ek, stated that the Universal Music Group’s music albums and songs will be available exclusively to the Spotify users two weeks before they go on the market. With this agreement artists who are part of the Universal Music Group will also have the ability to make their new album releases exclusively available on the service’s Premium service tier for a maximum of two weeks. The CEO of the UMG, Sir Lucian Grainge noticed that broadcasting via internet has been an important part of the Entertainment Industry and underlined that the Music Industry has grown significantly for the first time in the last 20 years.
In the explanations, no information was shared about the amount and duration of the agreement between Spotify and the Universal Music Group. After negotiations with the UMG, Spotify’s experts say that they are planning to have similar agreements with two other record labels, Warner Music Group and Sony Music Group sooner.
With these developments, Spotify is preparing for its first public offering (IPO) next year. Spotify has around 100 million users and 50 million subscribers in the world.