Report: Spotify To Spend $1B On Renewal Deal With Universal Music
March 12, 2015 at 3:52 AM (PT)
THE NEW YORK POST reports SPOTIFY, "expects to pay UNIVERSAL ... $1 billion over the next two years to cover music royalties, ad revenue and subscription fees, according to SPOTIFY projections of its growth rate and UNIVERSAL’s market share, contained in an internal e-mail, a copy of which was obtained by THE POST. The $1 billion number -- equal to the global revenue generated by all companies in the fast-growing streaming sector in 2013 -- underscores the extent to which SPOTIFY and other streaming services will drive digital revenue for the world’s biggest record company."
The report notes SPOTIFY’s payments to UMG, "are projected to account for 16% of the music giant’s recorded music revenue by MARCH 2017 -- up from 11% for the APRIL 2015 to MARCH 2016 period. In addition, UNIVERSAL, which owns a stake in SPOTIFY, will get 39% of its pretax earnings from SPOTIFY by 2017, up from 28% over the next 12 months, according to the e-mail, which factored in SPOTIFY estimates for UNIVERSAL’s growth."