A major row broke out between Universal, the world’s largest music company, and Spotify, the leading streaming service, earlier this year after Taylor Swift removed her albums from Spotify, arguing that its free service was undervaluing her music.
Universal, which was gearing up for negotiations to renew its song licensing deal with Spotify, joined the anti-“freemium” chorus to get Spotify to change its free service and encourage more users to opt for its paid-for premium service.
But after months of sounding off on each other, Grainge struck a more diplomatic note on the complex topic of how much music should be available for free versus paid services.
“We must seek the proper balance between ad-supported and paid subscription. It’s not one or the other,” Grainge said in a wide ranging interview this week with music blog Hits.com.
“With the two approaches in proper relationship, we can continue the level of investment we make in artists who then, in turn, can be fairly compensated for their work,” he added.
Just minutes after the interview posted on Thursday, Spotify’s top communications boss, Jonathan Prince, a former aide to President Obama, tweeted a link to the piece, adding: “Good reading here, smart comments on streaming — agree.”
The new conciliatory tone from both sides surprised industry watchers after months of both parties unleashing a volley of attacks.
Grainge, who recently re-upped his contract with Universal for another five years, has had plenty to say about the poor economics of ad-supported free music.
Speaking at a Re/code event in March, Grainge responded to a question about YouTube by saying, “Ad-funded isn’t a sustainable business model for them or us.”
Universal also parted ways with one of its top digital executives, Rob Wells, who had been a strong supporter of a free model.
Many in the music industry have reservations about the proliferation of free music as digital song downloads decline. Global downloads dropped 8 percent in 2014, according to global industry group IFPI.
Swift fueled the debate after she yanked her catalog from Spotify because it wouldn’t allow her to put her new album exclusively on its paid tier.
In response, Spotify unleashed its own broadside, hiring lobby groups and stoking regulatory concerns over possible antitrust violations.
Sources say Ek and Grainge were spotted exchanging words at this year’s Google Camp, held at the Valley of the Temples in Sicily.
It is not clear if they got down to any business.
Now the two look like they’re laying the ground work for a fresh round of talks that could lead to a new agreement. Spotify’s current extension is said to expire in the fall.
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