×

Spotify's deal with Universal music means nonsubscribers may wait two weeks for new albums

Daniel Ek, CEO and Founder of Spotify.
Getty Images
Daniel Ek, CEO and Founder of Spotify.

Some of the world's most popular musicians may now have the option to release albums on Spotify as Premium-only for two weeks, according to a new deal announced on Tuesday.

The new waiting period will be offered to artists with Universal Music Group, which owns brands that work with artists like Drake, Taylor Swift, Kanye West, Paul McCartney and Andrea Bocelli. It's designed to offer subscribers "an earlier chance to explore the complete creative work, while the singles are available across Spotify for all our listeners to enjoy," CEO Daniel Ek said in a statement.

The deal, which favors users of its $4.99 and up subscriptions, strikes at the heart of Spotify's battle with Apple Music, as the European start-up reportedly eyes an IPO.

Universal artist and mega-star Taylor Swift has been a loud critic of Spotify, calling it a "start-up with no cash flow [that] reacted to criticism like a corporate machine." Swift ultimately favored Apple Music, while Drake released an album as an Apple Music exclusive.

Spotify's new policy is flexible — not every album will be released on Spotify the same way, Ek said. For now, it's unclear which artists will participate.

While Swift and West have pressured the streaming industry, Universal Music boss Lucian Grainge said on Tuesday that the success of services like Spotify is "essential to the ecosystem's enduring health." The new Spotify deal affords Universal Music Group "unprecedented" access to Spotify's data.

"Eight years ago, when streaming was a welcome but small source of revenue, UMG embraced partners like Spotify as a way to help return music to a vibrant future benefitting the entire ecosystem," Grainge said. "Working hand in hand with these digital services brought us the industry's first real growth in nearly two decades. Today, streaming represents the majority of the business. Our challenge is transforming that upturn into sustainable growth."

Bolstering subscription revenue may be of growing importance at Spotify. Last month, the Financial Times reported that Spotify was on the brink of closing licensing deals that could take it closer to an initial public offering. (There was no mention of an IPO in Tuesday's announcement.)

Still, as Spotify is moving toward more exclusives, Apple may be moving away. Drake's latest album was not an Apple Music exclusive.

"When I was at radio, exclusives were the way to get the audience, because you would have the records before they were released. That doesn't happen anymore," Zane Lowe of Apple Music told CNET last month. "Most records are out all at the same time, so everyone's been forced to brush up on their editorial charms. How are you actually presenting the music, rather than owning it? ... Distribution is a choice, but it's not a hook I hang anything on."