Spotify Finally Finds a Way to Lower Licensing Deals and Go Public
Spotify will soon be entering the world of premium subscription services to win over licensing deals from major artists.This article originally appeared on Digital Music News
Last August, several sources spoke in confidence with Digital Music News. They noted that Spotify would prepare to offer exclusive content to paying subscribers only. One plan to limit content entirely to premium subscribers. The second would involve time-restricted exclusives.
Now, it’s happening. Nearly two years later, the Financial Times has all-but-confirmed the news. And a premium-only tier will help Spotify secure the types of licensing deals it desperately needs.
According to details tipped, the Swedish streamer would restrict the biggest album releases to only paid subscribers for a period of time. In turn, the major music companies have agreed to trim their licensing rates.
For years, Spotify was streaming music without securing long-term music licenses. In fact, the company hasn’t had a long-term contract in two years with Universal Music’s Vivendi. Now, sources told the Times that licensing talks have “picked up considerably.”
In fact, the Swedish streamer and major labels could finally ink deals. Yet, talks could stall once again (fair warning).
If Spotify finally lands licensing deals with major companies, it could potentially boost the company’s IPO appeal. This year, Wall Street once again rejected the streamer’s public listing. The reason? The company simply hasn’t made enough money. And licensing costs are a big reason for that.