Spotify Announces BMG Direct Deal Following UMPG, Kobalt Pacts

Photo Credit: Spotify

Another day, another Spotify direct deal – this time with BMG, which says its new publishing pact will “deliver greater value to songwriters and their teams.”

Stockholm-based Spotify and Berlin-headquartered BMG disclosed their “direct, multiyear US” tie-up in a brief release today. Unsurprisingly, the companies opted against divulging the agreement’s terms.

But the streaming platform’s bundling shenanigans (and the corresponding falloff in songwriter and publisher royalties) are well known at this point. So is the growing prevalence of direct deals – at least for the companies with the heft required to command comparatively advantageous terms.

Evidently, those companies include BMG, which CEO Thomas Coesfeld described as “pleased to agree on a progressive licensing model that reflects the real-world use of music.”

“Working directly with Spotify helps us reinforce our mission to ensure songwriters are fairly represented and rewarded for their work,” Coesfeld said in full. “We’re pleased to agree on a progressive licensing model that reflects the real-world use of music across digital platforms and are excited to take our partnership to the next level as we continue to redefine what a modern music company can be.

“We applaud their momentum and support their position on developing new AI protections. While we support the use of AI to enhance human creativity, these policies align with BMG’s philosophy and will help ensure that fair remuneration and protection of artists’ works remain non-negotiable,” he concluded.

On Spotify’s end, Daniel Ek seemingly has one foot out the door and, despite plans to continue as CEO until 2026, didn’t provide a statement. However, soon-to-be co-CEO Alex Norström framed the BMG union as part of a wider effort to forge “stronger collaboration across the industry.”

“At Spotify,” added Norström, “we believe the future of music depends on stronger collaboration across the industry. Our partnership with BMG advances that vision with renewed support for songwriters through a licensing model that will enhance how music is enjoyed on our platform.”

The first part of the remark is true to some extent; for Spotify, the future of on-platform music does depend on maintaining positive relationships with (or, at a minimum, not completely alienating) leading rightsholders.

As things stand, the majors’ publishing units and Kobalt likewise have Spotify direct deals in place; on the label and distro side, the DSP also closed out September by reupping with indie giant Merlin.

Regarding the latter part of the statement, Spotify has been touching on superfan-geared remix and mashup plans for a while now. And with new features rolling onto Premium amid loosened ad-supported restrictions, it appears safe to predict that pricing adjustments are forthcoming as well.