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Business News Deals Digital Labels & Publishers
Spotify renews global licensing deal with Warner
By Chris Cooke | Published on Thursday 2 April 2020
Spotify yesterday announced that it had agreed a new licensing deal with Warner Music which covers all the countries where the streaming service is already operating, and some additional markets where launches are planned.
Deals between Spotify and its music industry partners – ie labels, distributors, publishers and collecting societies – come up for renewal every few years. And while the basic structure of those deals pretty much remains the same, there are always some key sticking points each time new negotiations occur, not least because Spotify’s business model was always partly based on securing more favourable deals as it started to dominate the streaming market.
In recent years the push by the songs side of the business to increase its revenue share – and the resulting push back by Spotify to reduce the percentage of revenues allocated to the recordings side – was a key feature of these negotiations. Current discussions include Spotify’s increased focus on podcasts and what that means for things like per subscriber minimum guarantees. Some labels also remain concerned that the average revenue per user continues to decline and about the growth of the streaming firm’s artist services business.
Spotify and Warner had a falling out last year, of course, over the streaming platform’s launch in the Indian market. The mini-major wasn’t on board for Spotify’s launch in India, which meant the digital service didn’t have the rights to stream Warner’s recordings or Anglo-American songs catalogue in the country. The latter posed significant logistical challenges that saw Spotify decide that it could continue to exploit those songs under a compulsory licence in Indian copyright law, resulting in legal action from the major.
It was widely believed that the spat over Spotify’s launch in India was actually linked to wider discussions over the renewal of Warner’s global deal with the streaming firm. But that spat is at an end. An Indian deal with the Warner/Chappell songs business was announced in January and the new global deal covers India on the recordings side too.
Confirming the new deal had now been agreed, the two companies said in a statement yesterday: “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”.
