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BMG<\/strong> is the latest music publisher to agree a direct licensing deal with Spotify covering the streaming of its Anglo-American repertoire in the US market, and circumventing the compulsory licence administered by collecting society The MLC<\/strong>.\u00a0<\/p>\n The new deal, an official announcement declares, \u201creflects BMG and Spotify\u2019s shared interest in building a direct relationship that ensures songwriters share more directly in the value created by their work\u201d. Which sounds lovely. It\u2019s always nice to have shared interests, after all.\u00a0<\/p>\n Of course BMG, like the majors and Kobalt <\/strong>before it, entered into direct licensing talks with Spotify after the streaming service started exploiting a loophole in the compulsory licence to significantly reduce what it pays to songwriters and music publishers via The MLC.\u00a0\u00a0<\/p>\n BMG definitely had an interest in reducing the impact of Spotify exploiting that loophole, while Spotify had an interest in using that fact to get some extra benefits out of the music publisher. Somewhere in the middle of all that, some shared interests were identified.\u00a0<\/p>\n \u201cAt Spotify, we believe the future of music depends on stronger collaboration across the industry\u201d, says Alex Norstr\u00f6m<\/strong>, Co-President and soon to be Co-CEO at Spotify. \u201cOur partnership with BMG advances that vision with renewed support for songwriters through a licensing model that will enhance how music is enjoyed on our platform\u201d.\u00a0<\/p>\n BMG boss Thomas Coesfeld<\/strong> says he\u2019s pleased to have agreed a \u201cprogressive licensing model\u201d with Spotify, which \u201creflects the real-world use of music across digital platforms\u201d, and he is \u201cexcited to take our partnership to the next level as we continue to redefine what a modern music company can be\u201d.\u00a0<\/p>\n Music publishers like Sony Music Publishing, Universal Music Publishing, Warner Chappell, Kobalt and BMG have long had direct licensing relationships with streaming services like Spotify in Europe and many other markets around the world. However, in the US, since the creation of The MLC in 2021, the mechanical rights in songs have generally been licensed via the compulsory licence, while the separate performing rights are licensed through other collecting societies like BMI<\/strong> and ASCAP<\/strong>.\u00a0<\/p>\n But the MLC administered compulsory licence includes a bundling discount that allows a streaming service that bundles music with other content to reduce what it pays to songwriters and publishers.\u00a0<\/p>\n In 2023, Spotify started including audiobook access within its main premium subscription package and then, the following year, started applying the bundling discount to its royalty payments, much to the outage of writers and publishers.\u00a0<\/p>\n