Warner Music deal pushes Spotify closer to flotation
SPOTIFY has taken a major step towards a public listing after agreeing a long-term licensing deal with Warner Music Group.
The music streaming service’s agreement with Warner, one of the world’s biggest record labels, follows more than two years of negotiations. “It has taken a while to get here,” said Ole Obermann, the chief digital officer of Warner. “But it has been worth it.”
Spotify has now struck deals with Sony, Universal and Warner, and could float on the New York Stock Exchange by the end of the year. It has been reported that the company will opt for a direct listing – allowing existing investors to sell their shares on the public market – rather than an initial public offering when it does go public.
Spotify continues to grow ahead of rival services from Amazon and Apple, and last month reached 60m paying customers. However, its net losses more than doubled last year, despite a 50pc increase in revenues, due to a rise in royalty and distribution fees.
The nature of the deal with Warner was not outlined, but it is likely to include concessions from Spotify that allow the label to restrict certain songs for a limited amount of time.
“Our partnership with Warner Music Group will help grow the new music economy where millions of artists can instantly connect with fans, and millions of fans can instantly connect with artists,” Stefan Blom, Spotify’s chief content officer, told the BBC.
Earlier this year, Spotify bolstered its board by recruiting four new directors. The appointments included Tom Staggs, the former chief operating officer of the Walt Disney Company, who was widely tipped as a future Disney chief executive.