Spotify needs major labels and publishers, and major labels and publishers need Spotify. But that doesn’t mean they have to like each other.
Several months ago, Spotify unveiled an interesting plan.
The company would offer select independent/unsigned artists and management groups direct licensing deals. Popular indie artists and groups would receive substantially larger cuts for their works on the platform, plus ownership of their masters. They would also receive 5-to-6-figure cash advances.
Major labels weren’t happy about the move. And neither were indies.
This wasn’t just some errant musing.
So far, we’ve learned that Spotify has already made several direct deals involving substantial advances. But the extent of the deals remains unclear, as well as how far the company will expand this strategy.
Seeing the move as a threat to their business model, top executives at Universal, Sony, and Warner have rattled the cage, though we’re also not clear how this will play out in upcoming renegotiations.
Clearly taken aback, CEO Daniel Ek has spent months now convincing the music industry Spotify won’t compete against labels.
During the company’s Q2 2018 earnings call in July, Ek clarified,