The multiyear agreement will “foster groundbreaking new features providing value for artists and great experiences for music fans,” the companies said.
Spotify Technology SA jumped as much as 8.4% after signing a new licensing deal with Universal Music Group, the world’s biggest record company, which will help the streaming giant roll out new features.
The multiyear agreement will “foster groundbreaking new features providing value for artists and great experiences for music fans,” the companies said in a statement Wednesday. Financial terms of the deal weren’t disclosed.
The announcement reassured investors worried about Spotify’s sometimes-tense relationship with music labels. Access to their catalogs provides the lifeblood of its streaming service. Spotify also is seeking ways to better connect artists with fans — potentially opening up new sources of revenue — and working closely with labels is key to that.
A Spotify marketing program called Marquee, which was launched in a test form last year, has been used by artists such as the Weeknd and John Legend to promote their work. Universal was a key early supporter of Marquee, Spotify Chief Executive Officer Daniel Ek said in the statement.
As part of the pact, Vivendi SA-controlled Universal will “deepen its leading role as an early adopter of future products and provide valuable feedback to Spotify’s development team,” the companies said.
Spotify climbed as much as $23.29 to $299.67 on Wednesday in New York. The stock has nearly doubled this year, fueled in part by a push into new areas, such as original podcasts.
–With assistance from Kamaron Leach.
