Spotify Denies Report That It Targets Musicians Who Deal With Apple Music

Spotify Denies Allegations

SPOTIFY has flatly denied a BLOOMBERG NEWS story that it has been retaliating against musicians who give exclusives to APPLE MUSIC. People "familiar with the strategy" to BLOOMBERG that SPOTIFY has been making the songs of artists who offer APPLE MUSIC exclusives harder to find on their site, and that artists have been told they won’t be able to get their tracks on featured playlists once the songs become available on SPOTIFY. Those artists have also found their songs buried in the search rankings of SPOTIFY, even though the service denies it.

Sources have said the efforts have escalated over the past few months. Artists who have given exclusives to TIDAL, the streaming service run by JAY Z, have also been retaliated against.

Recent APPLE MUSIC exclusives by FRANK OCEAN, DRAKE and CHANCE THE RAPPER have caused much consternation among the music industry, with UMG's LUCIAN GRAINGE, angered by the OCEAN album in particular, reportedly announcing via an e-mail that his company's artists will no longer offer such exclusives.

APPLE MUSIC has emerged as the largest challenger to SPOTIFY over the past year, signing up more than 15 million subscribers since its debut last JUNE, the company said two months ago. SPOTIFY has more than 30 million subscribers globally.

APPLE MUSIC has ways to promote artists, such as highlighting their songs in its TOP TRACKS section.

SPOTIFY is in the midst of renegotiating licensing contracts with the world’s biggest record labels. The company wants to launch an initial public offering by the end of next year, but needs more favorable long-term agreements with the labels to attract a higher valuation. The company isn’t profitable despite generating more than $2 billion in revenue, in part because it has to give 55% of the money to labels and an additional cut to publishers.

Superstar artists need less help from SPOTIFY than emerging acts, which rely on the service to find new listeners. The company has threatened to use its retaliatory practices on lesser-known artists who introduce music on a APPLE MUSIC's BEATS 1 RADIO service.

APPLE and SPOTIFY have been at odds, and competition between the two ratcheted up again in the last several weeks after APPLE proposed changing songwriting royalties in a way that would increase costs for competitors like SPOTIFY by putting its music in a different category that requires a higher rate. SPOTIFY has also accused APPLE of blocking a new version of its iPhone app, the latest volley in an ongoing dispute over Apple’s cut of sales from its app store. APPLE denied the accusation, saying its rival hadn’t met its terms of service.

Led by JIMMY IOVINE, APPLE MUSIC has concentrated its efforts on helping artists like FRANK OCEAN and DRAKE with elaborate, multi-tiered marketing/promotion efforts on its exclusives. With ADELE and BEYONCE, it kept their music off its streaming service and initially only made it available as paid downloads. The company also has been appealing to artists and industry executives by limiting its streaming service to paying subscribers and not having a free advertising-supported version like SPOTIFY.

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