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Spotify’s new deal with Universal Music Group means some albums will go behind a paywall

It also means Daniel Ek’s company can IPO next year.

Spotify Press Announcement Michael Loccisano/Getty Images for Spotify
Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

Some of the most popular music in the world is going behind a paywall on the world’s most popular streaming service.

After months of negotiating, Spotify has signed a licensing deal with Universal Music Group. The big idea: Spotify has agreed to let Universal artists restrict new albums to Spotify’s 50 million paying subscribers for two weeks, while letting free users listen to singles.

In return, Spotify may get a break on the fees Universal charges for its music, depending on certain subscriber metrics. And that will give Spotify a big boost as it prepares to go public in 2018.

Here’s the way Spotify CEO Daniel Ek explains the deal, via a press release: “Starting today, Universal artists can choose to release new albums on premium only for two weeks, offering subscribers an earlier chance to explore the complete creative work, while the singles are available across Spotify for all our listeners to enjoy.”

The move is significant for the music industry, which has been trying to put the free music genie back in the bottle, and has recently had success getting people to pay $10 a month for subscription services. By restricting the new music free users can get, Universal hopes to get even more paid subscribers.

Spotify is still negotiating deals with the other big music labels — Sony Music and Warner Music Group — but it will use Universal’s deal as a template.

This article originally appeared on

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