Last week the news broke that Spotify had entered into a multi-year global license agreement with Universal Music Group (UMG) to provide the record label's artists with access to a "flexible release policy" for their albums. This sure generated a lot of chatter in the music community.
Known as "windowing," the concept is to grant Spotify's paid users with exclusive access to new UMG album releases for a two-week period. This deal marks a paradigm shift in Spotify's long-standing policy of providing access to complete albums on their release dates to all of its users, whether they were free or premium subscribers.
Since streaming has undoubtedly become a massive component of the recorded music business in recent years, reaching $5.8 billion in revenue in 2016, record labels are obviously trying to embrace new methods to further the growth of the streaming market in order to be successful. Adding the ability to window new release albums will create opportunities to develop innovative marketing campaigns to further the expansion of paid subscribers on streaming platforms, which can be beneficial to labels and artists, not just the streaming companies.
The recorded music industry is going through a massive transformation, and labels recognize the great importance of the long-term success of streaming platforms. The deal between Spotify and UMG to adopt windowing for album releases unquestionably creates a new incentive for free users to upgrade to premium.
Will this concept be embraced by music fans? Opinions are mixed. Some believe that windowing new releases will generate a higher level of buzz, thereby increasing paid subscribers on participating streaming platforms. However, others suggest that consumers are accustomed to finding new music on their platform of choice, whether free or paid, and will simply ignore a release or wait until later if it's not automatically made available to them.
Windowing is not in fact a brand new concept, it's been going with individual artists and labels. But now that it has been formalized in the UMG agreement, we are likely to see a more noticeable shift toward the deepening of relationships between record labels and streaming services, with the potential to lead to renewed growth for the recorded music industry in the near future.
Wondering how all of this relates to the tech?
From the point of view of technology, windowing itself is not a tough challenge (as I said, it’s been around for some time now) and can usually be adopted with minor amendments to existing release management systems. Still, as Sir Lucian Grange, chairman and CEO of Universal Music Group, mentions in his statement about the Spotify deal, the main point is reimagining distribution models and technologies, and even entire business models. Being a technology consultancy, DataArt often assists companies in doing just that, and I’d like to congratulate UMG’s leaders for their forward thinking and initiative. The music industry is known to have been called conservative and slow to embrace the digital disruption, keeping legacy systems and rigid structures. Deals such as the UMG–Spotify agreement mark milestones in the industry of major players embracing change and working with technology towards a mutually supportive business landscape.