Spotify’s deals with the big three record companies – Sony, Universal and Warner – have expired, reports MusicBusinessWorldwide. The contract with Universal is said to have expired more than a year ago, that with Warner at the beginning of 2016 and the contract with Sony a few months ago. Licensing of the music is said to continue on a monthly basis, but it is unlikely that a music catalog will be removed.
Nevertheless, according to the report, Spotify wants to secure long-term contracts with record companies. The background is, among other things, an alleged IPO. So far, Spotify has paid 55 percent of its sales to record companies, writes MusicBusinessWorldwide. Spotify would like to pay less in the future, one informant speaks of less than 50 percent – another in turn denies this value.
In any case, the record companies shouldn’t be too enthusiastic about it. Because these demand even more than the previous 55 percent. They want 58 percent of sales from Spotify – just as much as Apple transfers to record companies for Apple Music. So far, the record companies have favored the Swedish streaming service with more favorable conditions so that the start-up can expand its customer base. But this concession should now come to an end.
However, Spotify argues that Apple’s 58 percent only applies after the three-month free period, the report said. If one included this period, the value would not be so impressive. However, Spotify also offers a free period for new subscribers – not three months, but at least one month. The informants from MusicBusinessWorldwide still assume that the two contractual partners will come to an agreement – and that Spotify will pay about the same as before.
Via Music Business Worldwide