In a statement, the two companies said they have signed “landmark licensing agreements” that will result in an “innovative tool,” powered by generative AI technologies, that “will open up additional revenue streams for consenting artists and songwriters.”
The tool “will allow fans to create ‘covers’ and ‘remixes’ of their favorite songs by participating artists and composers,” and will be presented as a complementary payment service for Spotify Premium users, indicates the note, which does not specify a specific date.
The companies highlighted the impact of this “creation model” for artists and songwriters, who will be able to earn additional income to what they already earned on Spotify thanks to the “value generated through AI-based licensed covers and remixes on the platform.”
“What we are building is based on the consent, recognition and compensation of the artists and songwriters who participate,” Alex Norström, co-CEO of Spotify, was quoted as saying.
For his part, the president and CEO of Universal Music Group, Sir Lucian Grainge, said that the initiative is “artist-focused, rooted in responsible AI” and predicted that it “will boost the growth of the entire musical ecosystem.”
Book for concerts
The platform will also launch an option for lovers of concerts by prominent artists. The launch of “Reserved” was announced, which identifies an artist’s most engaged users and reserves them two seats for a concert.
Spotify offers early access, but these tickets would be reserved for specific users instead of simply giving access to a pre-sale line, Telemundo’s page explains. This will be through an agreement with Live Nation Entertainment Inc.
These announcements were part of Spotify’s quarterly results presentation, which reported having 761 million active monthly users, of which 293 million pay for the Premium service.
Access will be dedicated to Premium users and to avoid virtual queues and other technical problems. The company will use a combination of metrics to decide who will be in that group.
In the first quarter of the year, Spotify had an operating profit of 715 million euros (40% more year-on-year) and revenues of 4.5 billion euros (8% more year-on-year), and issued favorable forecasts that were liked by analysts.
Following the news, Spotify shares soared up to 15% on Wall Street.