Closer to IPO
Spotify has signed a new licensing deal with Warner Music that puts them one step closer to going public.
The deal makes Warner’s catalogue available to Spotify’s 140m users after two years of negotiations and has seen Spotify forced to agree to some limitations.
Ole Obermann, Chief Digital Officer, WMG, said: “It’s taken us a while to get here, but it’s been worth it, as we’ve arrived at a balanced set of future-focused deal terms.
“Together with Spotify, we’ve found inventive ways to reinforce the value of music, create additional benefits for artists, and excite their fans all over the world. Even with the current pace of growth, there’s still so much potential for music subscription to reach new audiences and territories.”
The inventive ways to reinforce the value of music have not be outlined but artists and lables have long complained about smaller amounts of revenue from steaming sites when compared to downloads or physical sales.
If the deal with Warner Music is similar to those agree with Sony and Universal it could mean that certain songs may be held back from Spotify’s non-paying users for a limited period of time. This would increase the royalties for artists who have criticized the lower earnings generated by streaming services.
Having now struck deals with leading records Sony, Universal and Warner the streaming service is expected to float on the New York Stock exchange by the end of the year.
“Our partnership with Warner Music Group will help grow the new music economy where millions of artists can instantly connect with fans, and millions of fans can instantly connect with artists,” Spotify’s chief content officer Stefan Blom told the BBC.