Spotify got its investors excited this morning by announcing that it had “reached agreement with two of our four major label partners on the renewal of our global sound recording licenses”.
Having spoken to senior sources across the industry, MBW has discovered who those two referenced partners are: Sony Music and independent label rep Merlin.
This means that Spotify is still yet to sign a new global licensing deal with Universal Music Group – the biggest recorded music rightsholder in the world – in addition to the third biggest, Warner Music Group. Talks are continuing with both parties.
It is MBW’s understanding that Sony Music has an active deal with Spotify in play, which is not up for renewal this summer – setting it apart from UMG and WMG in this respect.
As for our knowledge that Merlin’s re-signed?
Aside from the fact that our sources have confirmed both Universal and Warner remain in active talks over re-licensing deals, you really only have to study Spotify’s language for a big clue.
Had Spotify signed deals with two parties from Universal, Sony and Warner, would it have stated “two of our four major label partners” or “two of our three major label partners”? Especially seeing as Merlin has never claimed to be a ‘major label’, unlike the other trio?
Perhaps, however, if you were a digital service looking to talk up the deal you’d just inked with Merlin to your investors, you might be inclined to phrase things differently.
A Merlin rep declined to comment when contacted by MBW.
Spotify said of its active discussions with the remaining two major labels today (July 31): “This is the sixth round of label negotiations we’ve worked through in our thirteen year history and, while it is typically a long drawn-out process, it has become part of the normal cadence of the business.”
Spotify’s total revenue in Q2 2019 stood at €1.67bn, up 31% YoY.
Premium/subscription revenue made up 90.1% of this figure at €1.50bn, also up 31% YoY.
Quarterly ad-Supported revenue of €165m grew 34% YoY, and was up by €39m on the €126m posted in Q1 2019.Music Business Worldwide
