About two years ago Spotify fell out of a long-term licensing deal with Universal Music Group. Since then, the service’s deals with UMG’s biggest two recorded music rivals, Sony Music Entertainment and Warner Music Group, have also expired.
Music Business Worldwide already reported, last year, that Spotify was negotiating to drive down the share of revenue to record labels from 55% – closer to 52% or even 51%. Now "Financial Times" is reporting optimistic news: it says that “licensing talks have picked up considerably” between the two parties – and even that “deals [with the major labels] could be inked within weeks”.
According to the FT’s sources, Spotify has buckled on one crucial point: finally agreeing to allow blockbuster album releases to be "windowed" on its premium tier. It would be a big step into the future for the music business if true, and would certainly help Daniel Ek breathe a sigh of relief.
The labels also want to see Spotify offer them (and their artists) more control generally over the availability of their music – giving each campaign more direct flexibility in balancing what goes "free" and what goes "paid". And at least two major labels, MBW hears, have also suggested that Spotify agree to hitting subscriber growth targets. Presumably, if the streaming company does not meet these targets in future, any agreed revenue share reduction would be paused or reversed.
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