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Leila Abboud and Shira Ovide

Spotify and Universal Strike Right Chord

Their compromises on a new contract introduce a measure of sanity.

Cue the singing angels. After interminable wrangling, the world's biggest music label and the world's biggest streaming service have agreed on new contract. That Vivendi's Universal Music Group and Spotify Ltd. overcame the acrimony bodes well for both.

The deal includes key compromises on both sides: Universal Music has agreed to accept a lower royalty rate for each song than it received under the old contract, but only if Spotify hits certain targets on increasing its paying subscriber base. Neither company disclosed exact figures, but suffice it to say that if Spotify lures more customers it will pay less than the current rate of roughly 55 percent.