Sony Music Group and Spotify have struck a new multi-year global licensing deal that spans both recorded music and publishing.
Spotify’s agreement with Sony Music Publishing includes a new direct licensing arrangement in the US, which the streaming company says will “ensur[e] songwriters share more directly in the growth of streaming”.
The agreement marks Spotify’s latest direct deal with a prominent music publisher and moves its agreement with SMP beyond the traditional CRB model in the US.
This means that the direct deal supersedes the audiobook ‘bundling‘ payment structure that, starting in March last year, saw Spotify dramatically cut the rate of mechanical royalties paid to publishers and songwriters in the US.
All three majors have now inked direct publishing agreements with Spotify.
Universal Music Publishing Group and Warner Chappell Music signed direct licensing deals with Spotify in January and February, respectively, that override the CRB bundling discount.
Spotify also signed a direct licensing deal with Kobalt covering the US last month.
Commenting on the deal, Rob Stringer, Chairman of Sony Music Group, said: “Sony Music Group and Spotify have long been mutually committed to advancing music streaming and growing the marketplace for all.”
“Sony Music Group and Spotify have long been mutually committed to advancing music streaming and growing the marketplace for all.”
Rob Stringer, Sony Music Group
Added Stringer: “This is further reflected in our new agreements where we’re working to develop futuristic approaches that ensure our artists and songwriters remain appropriately compensated for their work, and audiences are getting a high-quality experience that’s ever evolving.”
“Our partnership with Sony is built on a shared drive to shape the future of music.”
Daniel Ek, Spotify
Daniel Ek, Spotify’s Founder and CEO, said: “Our partnership with Sony is built on a shared drive to shape the future of music. Together, we’re accelerating the pace of innovation to create powerful new opportunities and increasing revenue for artists and songwriters.
“These agreements aren’t just a milestone; they’re a catalyst for building a more dynamic and prosperous music ecosystem for everyone.”
“This alignment creates space for new opportunities and long-term growth for everyone involved.”
Alex Norström, Spotify
Alex Norström, Co-President & Chief Business Officer at Spotify, said: “These deals with Sony Music Group are built to better support artists and songwriters by unlocking new formats and forging deeper connections with fans.
“This alignment creates space for new opportunities and long-term growth for everyone involved.”
Key phrases in today’s official statement offer important clues about what might appear on Spotify’s product roadmap soon.
In the press release announcing the news on Thursday (September 18), the companies said that Sony Music Entertainment and Sony Music Publishing “have each entered into multi-year agreements with Spotify focused on delivering continued growth and innovation in music streaming that provides greater value for artists, songwriters and consumers worldwide”.
The statement added: “The companies will work together to keep improving the listening experience while creating more opportunities for artists and songwriters to reach audiences everywhere.
“These initiatives will launch new product offerings, including enhanced audio and visual formats that enable deeper connections with fans.”
As we pointed out last month when Spotify announced its Kobalt deal, and also hinted then about working on “new formats,” one particular new “audiovisual format” not yet available on Spotify in the US is music videos.
If music videos in the US are indeed one of Spotify’s “new product offerings,” a licensing deal with Sony that covers music video usage in the US ahead of the format’s probable launch there would make sense.
Other recent deals struck by Spotify include a multi-territory, multi-year renewal deal with Amra, the global digital licensing collection society.
The agreement followed a week after Spotify’s direct licensing deal with Kobalt, which covered only US operations.
Kobalt’s catalog is globally licensed outside the US by Amra. Indeed, amra is a sister company of Kobalt, representing both Kobalt’s rights and those of third-party clients.Music Business Worldwide
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