One of the top players in music streaming, Spotify is expected to become a publicly traded company next year,but as the The Wall Street Journal Reports Spotify has one issue not attracting inventors, their current record label contracts.
Spotify is now operating on short-term extensions of its old contracts with all three major record companies, having been on a month-to-month basis with at least one of the labels for nearly a year. It is negotiating new deals that would make its finances more attractive to investors.
Spotify looks to pay a smaller share of the current 55% of revenue share they pay to record labels and artists. However WSJ says that “some major label executives want Spotify to pay them as much as 58% of revenue from both its free and paid tiers.”
Some labels want more exclusivity for their artists that the free users can’t access. Similar to other current popular streaming services. Others want to restrict free usage in hopes to drive more paid subscribers.
WSJ believes the labels and Spotify don’t see eye to eye on some fundamental issues. In addition to what Spotify should pay for the music, record companies and their artists have also butted heads with Spotify over its practice of making its entire 40 million-song catalog available to both free and paid users at the same time.
Spotify has already had to deal with artist like Taylor Swift, and others who have denied their music catalog from the streaming service due to the free feature.
PHOTO SOURCE: Getty/ Wall Street Journal