Is Spotify For Sale?
June 13, 2014 at 3:52 AM (PT)
Yes, writes DIGITAL MUSIC NEWS, reporting, "In the wake of the highly-successful acquisition of BEATS by APPLE, major labels WARNER MUSIC GROUP, SONY MUSIC ENTERTAINMENT and UNIVERSAL MUSIC GROUP are now focusing on the next prize: a massive SPOTIFY acquisition or liquidity event. According to several sources inside and outside of the major label system who have agreed to speak with DIGITAL MUSIC NEWS, the BEATS sale is ‘simply small potatoes’ compared to the juicy prize that SPOTIFY could represent, and labels are pulling as many strings as possible to make a ‘giant liquidation event’ happen."
The report notes the record labels own roughy 20% of SPOTIFY.
"The shift is a result of some re-engineering by the major labels on how they profit from streaming services," adds DMN. "In the older model, labels focused more on large, upfront guarantees in exchange for the rights to use their valuable catalogs. RHAPSODY, for example, has bitterly complained about that approach in the past, but according to a pair of sources close to those deals, that has shifted considerably over the past few years. '[The big recording labels] decided they want equity more than payments, because there’s a market [for acquisition] now,' one source said.