Streaming spat: Spotify said to retaliate against Apple Music’s exclusive artists

AN escalating battle between Apple, Inc. and Spotify Ltd. is leaving some musicians caught in the crossfire.

Spotify has been retaliating against musicians who introduce new material exclusively on rival Apple Music by making their songs harder to find, according to people familiar with the strategy.

Artists who have given Apple exclusive access to new music have been told they won’t be able to get their tracks on featured playlists once the songs become available on Spotify, said the people, who declined to be identified discussing the steps. Those artists have also found their songs buried in the search rankings of Spotify, the world’s largest music-streaming service, the people said. Spotify said it doesn’t alter search rankings.

Spotify has been using such practices for about a year, one of the people said, though others said the efforts have escalated over the past few months. Artists who have given exclusives to Tidal, the streaming service run by Jay Z, have also been retaliated against, the person said, declining to identify specific musicians.

Apple’s music service has emerged as the largest challenger to Spotify over the past year, signing up more than 15 million subscribers since its debut last June, the company said two months ago. Exclusive deals for new music from artists such as Drake, Chance the Rapper and Frank Ocean are central to Apple’s strategy. Spotify has more than 30 million subscribers globally.

Apple Music also has ways to promote artists, such as highlighting their songs in its Top Tracks section, giving it ways to play favorites with musicians.

The dustup over exclusives comes at a critical time for Spotify, which is in the midst of renegotiating licensing contracts with the world’s biggest record labels. The company is aiming to hold an initial public offering by the end of next year, but needs more favorable long-term agreements with the labels to attract a higher valuation from investors, according to a person familiar with the plans. The company isn’t profitable despite generating more than $2 billion in revenue, in part because it has to give 55% of the money to labels and an additional cut to publishers.

It’s not clear whether major artists like Drake and Ocean have been affected by Spotify’s measures, and their representatives didn’t respond to questions. In any case, artists of their stature need less help from Spotify to draw attention to their music, emerging acts rely on the service to find new listeners. The company has threatened to use its retaliatory practices on lesser-known artists who introduce music on a Beats One show hosted by DJ Zane Lowe, an architect of Apple’s radio service, the people said. — Bloomberg