Universal Music Group and Amazon Music ink new deal, including exclusive content… and with ‘Streaming 2.0’ at its heart

Universal Music Group (UMG) and Amazon Music have jointly announced a renewed worldwide licensing agreement today (December 23).

According to a press release, the deal encompasses an “expanded global relationship that will enable further innovation, exclusive content with UMG artists, and advancement of artist-centric principles including increased fraud protection“.

The PR claims that the deal will ensure that “UMG’s artists achieve their commercial potential through [Amazon Music’s] continued product enhancements and exclusive content that elevate authentic engagement between artists and fans“.

Speaking in a statement today, Universal Music Group CEO & Chairman, Sir Lucian Grainge, commented: “We are very excited to advance our long-standing, excellent partnership with Amazon Music that marks a new era in streaming — Streaming 2.0.”

This isn’t the first time we’ve heard “Streaming 2.0” mentioned by Grainge and his management team.

It was at the center of UMG’s Capital Markets Day for investors in September, where it was explained that for UMG, ‘Streaming 2.0’ represents a new era of digital music hung on changes, including:

(a) Streaming subscription offerings becoming ‘segmented’, with more expensive options for music ‘superfans’;
(b) Subscription ARPU (average revenue per user) moving upwards across music platforms, partly as a result of the aforementioned ‘superfan’-targeted offerings, and partly as a result of future streaming price rises.

An additional key pillar of ‘Streaming 2.0’ is the adoption of what UMG calls “artist-centric principles” by streaming platforms.

In short, ‘artist-centric’ adjustments affect the way music streaming platforms pay out royalties, typically benefitting artists who’ve built significant fanbases vs. acts with fewer than 1,000 monthly listeners.

‘Artist-centric’ also encompasses a mission to curb the impact of streaming ‘fraud’ on platforms, including attempts by organized criminals to use ‘fake’ plays of AI music to extract money from the royalty pool.

A slide shown at UMG’s Capital Markets Day in September, highlighting some of the key pillars of ‘Streaming 2.0’

Commenting further on the new Amazon deal, Sir Lucian Grainge said: “We appreciate Amazon Music’s deep commitment to the interests of our artists, and look forward to progressing our shared artist-centric objectives through product innovation and accelerating growth of their service.”

Steve Boom, VP of Audio, Twitch and Games for Amazon, added: “UMG has always been a collaborative partner to Amazon Music, and as we continue to invent and introduce more artist-to-fan connections through our product and exclusive content, we’re redefining what it means to be a streaming service.

“We’re thrilled to expand our relationship with UMG which will enable us to partner on meaningful new ways for artists to deepen their engagement with fans around the world, while working together to protect the work of artists, songwriters and publishers.”

Interestingly, the new agreement includes a pledge from UMG to “collaborate with Amazon Music as it continues to expand in audio, including further innovation in audiobooks, audio and visual programming, and its investment in livestreamed content”.

The mention of audiobooks there comes around one month after Amazon announced it was making Audible audiobooks available for Amazon Music Unlimited subscribers.

In contrast to a separate (and now-infamous) audiobook bundling move from Spotify earlier this year, the Amazon announcement was met with the blessing of major music publishers.

The press release issued by Amazon and UMG today further mentions both sides’ commitment to “advance and safeguard human artistry” – a reference to addressing issues caused by AI-generated content.Music Business Worldwide