Tuesday, August 30, 2016

Spotify Releasing Some New Music To Paying Customers Only

Spotify reportedly is discussing making some new music available only to paying subscribers in hopes of ending a months-long impasse with the major record companies, The NYPost has learned.

In meetings with label execs the past few weeks, the Swedish outfit has signaled a willingness to “window” — putting new releases on its paid tier and off its free service for a set time, sources said.

Spotify’s current business model calls for making all music available on both its free and paid services to attract the most users and boost its valuation, sources said.

But that strategy has led to tension with the labels and artists, including a blowout with Taylor Swift, who yanked her music from the service back in 2014 in protest.

The recent change of heart for Ek stems from a desire to make Wall Street happy, sources said.

Investors are worried about Spotify’s chances of pulling off an initial public offering — possibly as soon as this fall, according to sources — without locking in long-term deals with the labels.

“There is mounting pressure from artists and labels. There is not going to be an IPO unless they have deals,” said one source close to the talks.

Spotify is currently operating on rolling month-to-month contracts with all three major labels: Universal Music Group, Sony and Warner Music Group.

As part of its negotiations, Spotify wants to lower its revenue split and make its finances more attractive to potential investors.

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