Spotify’s New Licensing Deal Eases Path to Going Public -
By BEN SISARIOAPRIL 4, 2017
After two years of on-and-off negotiations, Spotify and the world’s biggest record company have finally agreed to a licensing deal
that paves the way for Spotify to go public and gives the music industry more flexibility in how new albums are streamed.
The Universal deal includes a concession that the music industry has long sought,
and which Spotify has fought hard against: The service will now let Universal and its artists withhold new releases for two weeks from its free tier, which pays far lower royalties than the paid version.
The streaming music company, which has been valued by investors at more than $8 billion, has by far the largest service of its kind, with 50 million paying subscribers
and at least another 50 million who listen to music on Spotify’s free tier, which has advertising.
But without contracts in place guaranteeing the presence of the music on its service — Universal controls around a third
of all music sales around the world — the company would have difficulty attracting investors on the public markets.
