Last summer, Spotify rather shrewdly told investors that it had signed new global licensing agreements with “two of our four major label partners”.
This was, in truth, stretching things a bit: MBW subsequently discovered that one of these ‘major labels’ wasn’t a major label at all – it was indie sector agency Merlin – while the other, Sony Music, didn’t actually have a deal up for renewal.
The two remaining major record companies, those without a Spotify deal, were Warner Music Group and Universal Music Group.
Both of these companies’ prior global deals with Spotify ran out in 2019 – and we haven’t heard from either of them since about any fresh multi-year licensing agreement with Daniel Ek’s company.
That is, until today (April 1): Warner Music Group and Spotify have just confirmed in a short and basic statement, that they have indeed inked a new global contract.
It reads: “Spotify and Warner Music Group are pleased to announce a renewed global licensing partnership. This expanded deal covers countries where Spotify is available today, as well as additional markets.
“The two companies look forward to collaborating on impactful global initiatives for Warner artists and songwriters, and working together to grow the music industry over the long term.”
“Spotify and Warner Music Group are pleased to announce a renewed global licensing partnership. This expanded deal covers countries where Spotify is available today, as well as additional markets.”
Spotify and Warner joint statement
Spotify is expected to launch in South Korea in the coming months.
One of the sticking points of negotiations between Spotify and, separately, Universal and Warner, has reportedly been about podcasts.
According to a Financial Times article published in February, the major record labels expect a guaranteed minimum percentage of Spotify subscription revenues, regardless of how much music these subscribers actually consume.
Spotify, however, apparently questions that view – positing the notion that if a subscriber listens to nothing but podcasts on its service, the record labels shouldn’t get their money.
It seems as though Warner and Spotify might have met somewhere in the middle on this issue.
The awkward fact lurking in the background of their discussions: according to NPR/Edison Research, music listening as a percentage of audio media activity in the United States is falling, as spoken word programming (including podcasts) gains in market share.
Today’s news comes two months after Warner’s publishing company, Warner Chappell Music, and Spotify ended a legal dispute in India – a fallout which also resulted in a new global licensing agreement for Chappell’s publishing rights.
In the past, Warner Music Group CEO, Steve Cooper (pictured) has called into question attempts by streaming services such as Spotify to push down entry prices for subscribers via family plans and discount offers.
On a Warner earnings call in May last year, Cooper stated that Warner would continue to “push back against the devaluation of our artists’ and songwriters’ music from freemium models, mismanaged family plans and other customer acquisition strategies employed by streaming platforms at the expense of creators”.Music Business Worldwide