Spotify inches closer to going public after inking Warner Music deal

25 Aug 20176 Shares

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Spotify app. Image: norazaminayob/Shutterstock

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Spotify clears its largest obstacle before it likely goes public.

Music streaming behemoth Spotify has renewed its licensing deal with Warner Music Group, meaning the service now has agreements with the big three music labels, the others being Universal and Sony Music.

The BBC reported that Spotify’s hand was somewhat forced in the negotiation process, with limitations put in place in order to get the nod of approval from Warner.

With this deal, though, we could see Spotify go public on the New York Stock Exchange (NYSE) as early as this year.

‘Together with Spotify, we’ve found inventive ways to reinforce the value of music, create additional benefits for artists and excite their fans all over the world’
– OLE OBERMANN

Spotify’s chief content officer, Stefan Blom, told the BBC: “Our partnership with Warner Music Group will help grow the new music economy where millions of artists can instantly connect with fans, and millions of fans can instantly connect with artists.”

Bypassing an IPO?

Reports are hinting that Spotify will not have a traditional initial public offering (IPO), and instead will be listed on the NYSE without a sale.

The final deal follows April’s agreement between Spotify and Universal, with many artists on the label being given the opportunity to restrict their albums to subscribers only for the initial two weeks of release.

Warner Music Group chief digital officer Ole Obermann said: “It’s taken us a while to get here but it’s been worth it, as we’ve arrived at a balanced set of future-focused deal terms. Together with Spotify, we’ve found inventive ways to reinforce the value of music, create additional benefits for artists and excite their fans all over the world.

“Even with the current pace of growth, there’s still so much potential for music subscription to reach new audiences and territories.”

The “inventive ways” Obermann describes will likely mirror Spotify’s agreement with Universal, with certain artists and albums placed under temporary paywalls for subscribers only.

Spotify app. Image: norazaminayob/Shutterstock

Ellen Tannam is a writer covering all manner of business and tech subjects

editorial@siliconrepublic.com