FILE PHOTO: The Spotify logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 3, 2018. REUTERS/Brendan McDermid
(Reuters) – Spotify Technology said on Wednesday it signed a new, multi-year licensing agreement with Vivendi’s Universal Music Group (UMG), the label behind artists such as Taylor Swift and Coldplay.
Shares of the Stockholm-based company rose 6.2% in early trade, taking their yearly gain to 96%.
Spotify and UMG said they would collaborate on new, marketing campaigns across the music streaming company’s platform, while UMG would also deepen its role as an early adopter of future Spotify products.
Under pressure from investors to more regularly turn a profit, Spotify has been looking at new ways to boost earnings without raising subscription prices and risk losing listeners to rivals.
The company’s new deal signs UMG, the world’s largest record company, to its “two-sided marketplace” – a feature, which in testing, allowed artists and their teams to pay for their content to show up as sponsored recommendations.
The companies did not disclose the length and financial details of the agreement.
As competition in the streaming space grows, Spotify has also been looking at other ways to attract subscribers, such as rolling out a video feature for podcasts.
Reporting by Sudip Kar-Gupta and Uday Sampath, editing by Louise Heavens and Aditya Soni