Spotify will allow indie labels to hold new music behind paywall

Thomson Reuters

Thomson Reuters

Now, indie labels have reach a similar agreement with the streaming service. There was a catch, however: UMG would lower royalty fees for the streamer in exchange for a timed-window release on certain UMG releases.

Spotify Premium provides students with uninterrupted music without ads, instant access to more than 30 million songs, take their music collection offline and listen to their playlists anywhere without using up data. Paid users would have access to fresh albums on their release dates.

Spotify CEO Daniel EK tweeted: "Indie music has been a huge part of our success since day one & I am super happy to say we have a new, multi-year deal [with Merlin]". "The agreement "[ensures] the world's leading independent record labels and their artists will remain at the core of Spotify's offering to music fans". It's being described as a "flexible release policy" but it's unclear how many new albums this could potentially affect.

Its stable includes classic British indie labels such as Beggars Group and Sub Pop through to German electronic music label!K7, Kobalt Music, which licenses the music of Prince, and Mad Decent, a US label which has distributed everything from African and Brazilian funk to artists like Outkast. To put things in perspective, that is around 12 percent of the digital recorded music market and the firm itself, is Spotify's fourth largest partner after labels like Sony, Universal and Warner Music.

The move seeks to offer an incentive for non-paying users to upgrade to Premium. If successful, these timed-window releases may not only become the standard on Spotify, but across all major streaming services as well.

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