X

Music streaming giant Spotify is said to have signed a new deal with Sony Music, ahead of a seemingly-inevitable IPO.

Originally reported by Billboard and The Verge, the new agreement is said to be similar to one the company signed earlier this year with Vivendi’s Universal Music Group.

That agreement gave Universal artists more control over how Spotify distributes their content. They can hold back new albums to paid subscribers for up to two weeks, while offering singles available to free users.

Spotify, in turn, gained a break on royalties if it hits certain targets. Essentially, the more users who listen to UMD content, the less money Spotify is obligated to pay out in royalties.

The UMD deal was signed in April.

A third deal with the Warner Music Group is still believed to be under negotiation.

It’s believed that arrangements like this are crucial to Spotify’s efforts to reconfigure itself as a profitable company. To date, the company has never once finished the financial year with a profit.

The company has yet to release an official statement on the Sony deal.

While Spotify still has a strong lead over Apple Music, the company’s move to raise $1B in debts in March 2016 came with the condition that the company finally offer its shares to the public.

The longer Spotify wait to do this, the more time they’ll have to sign these new, more profitable deals with major content companies. However, it’s understood that a prolonged prologue to the company going public will also see it under the accelerated interest terms of the $1B loan.

Leaderboard 728x90 Spotify To Sign New Deal With Sony
%name Spotify To Sign New Deal With Sony
728x90 Tour Spotify To Sign New Deal With Sony
cs2203g0026 009 624347 au cs co re fy23q2w5 sit in7420 2in1 728x90 R2 Spotify To Sign New Deal With Sony
CUST Retention FY22 Sport WinterCodes Q3 NRL 728x90 Spotify To Sign New Deal With Sony
4 Square Leaderboard 728x90 3 Spotify To Sign New Deal With Sony
4 Square Leaderboard 728x90 1 Spotify To Sign New Deal With Sony
PX7S2 728x90 1 Spotify To Sign New Deal With Sony
ARL0618 Arlo Bday Sale Banner 728x90px 72dpi V2 Spotify To Sign New Deal With Sony
Olimpia Splendid Unico Cooling 728x90 1 scaled Spotify To Sign New Deal With Sony

YOU MAY ALSO LIKE