“The next era of streaming innovation.” That’s how those involved describe the deal Universal Music Group and Spotify have struck. The multi-year agreement will impact recordings and artist royalties and is billed as the first step in what the companies call the “streaming 2.0 era.”
The deals are back. The pact is notable for many reasons, but mostly because it’s the first deal of Spotify with a major industry player in several years. There’s also talk of improving artist payment terms, which have been declining since last April due to a U.S. tariff on the platform aimed at audiobook listeners. Leveraging a 2023 law, the tariff allowed Spotify to reduce songwriter royalties, provoking backlash from the music community. This deal with Universal addresses some of the issues raised by that tariff, but it’s not solely focused on that.
Spotify for superfans. The concept of “streaming 2.0” isn’t new—Universal has been exploring it for some time. But this deal marks a significant step forward. What might “streaming 2.0” look like? The Verge describes it as “Spotify for superfans.” According to Universal, this could include “super-premium” subscriptions offering perks such as early access to music, exclusive deluxe editions, high-resolution audio, and artist Q&A sessions.
More streaming than ever. “Streaming 2.0” aims to enhance platforms’ technological capacity to deliver extras to consumers. This means platforms need deals with major labels to provide better-quality audio, accompanying videos, exclusive content, and artist-specific perks. Alternatively, the majors themselves could merge their streaming services, much like what occurred in the video streaming sector after Netflix’s rise. Is Spotify following suit?
Does this deal make sense? Similar ideas have been tried in the video streaming world. Prime Video, for instance, includes features like “X-Ray,” offering trivia, filmographies, and e-commerce options tied to its content. However, few would argue these extras are a major draw compared to its catalog of movies and shows. These days, people prioritize catalogs—they subscribe, binge content, and unsubscribe in quick cycles. While extras like those in “streaming 2.0” may sweeten the deal, are they truly the foundation of streaming’s future?
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