Warner Music Group and Spotify Has announced a new, multi -year agreement, which covers both recorded music and music publishing, which effectively ends the companies’ disputes about the streaming giant’s “Bundling” alternative, which pays the rights holders less in royalties by offering audio books and music together for a reduced subscription fee. Universal Music met a similar deal with Spotify Just a few days ago. Although the conditions for the deal were not announced, it seems that a compromise has been reached over royalties.
According to the announcement, the New Deal “will help deliver new fans experiences, a deeper music and video catalog, additional paid subscription levels and differentiated content buzzers. The agreement is also based on the companies ‘existing adaptation of “artist centric” royalty models that reward and protect the artists’ power to attract and engage the audience. “Like the Universal’s Deal, the new publication agreement introduces a direct license model with Warner Chappell Music in several additional countries including the United States
Robert Kyncl, CEO, WMG, said: “This large agreement provides new benefits for artists, songwriters and fans, while unlocking further collaboration that extends the music ecosystem. It is a big step forward in our vision for greater adaptation between rights holders and streaming services. Together with Spotify, we look forward to increasing the value of music, as we drive growth, influence and innovation. ”
Daniel Ek, Spotify’s founder and CEO, said: “For Spotify, 2025 is a year of accelerated implementation, and our partners at Warner Music Group share our commitment to rapid innovation and lasting investments in our leading musicians. Together we drive the boundaries of what is possible for the audience all over the world – which makes paid music subscriptions more appealing while supporting artists and songwriters. “
The announcement was made together with a mixed revenue report for Warner, which saw total revenue decreased by 5% (4% in constant currency) and operating profit decreased approximately 40% to $ 214 million, as opposed to $ 354 million in the previous year. On the revenue call on Thursday morning, Kyncl pointed to “temporary macro conditions” as a reason for the drops.
Revenue decreased by 4.7% (or 3.6% in constant currency). According to the announcement, recorded growth was affected by music revenue by an extension of the license agreement for an artist catalog, which resulted in $ 75 million in license revenue during the previous quarter. Recorded music growth was also affected by the termination of the distribution agreement with BMG, which resulted in $ 32 million less recorded music revenues compared to the previous year’s quarter, of which $ 16 million affected streaming revenue and $ 16 million affected physical revenues and a renewal with one of the company’s unspecified Digital , which resulted in $ 30 million in recorded music flow revenue during the previous year’s quarter (or $ 26 million in constant currency).
More to come …
