Fresh off a pact to license music to YouTube, Warner Music boss Steve Cooper is turning his attention to music streamer Spotify â and a deal could be signed by June.
Sources tell On the Money that Warner and Spotify are getting this close to a new royalty agreement. If inked, Daniel Ekâs Spotify would be on the way to its long-planned IPO â expected in the final quarter of 2017.
Spotify signed new long-term deals with Universal Music Group and with independent music representative Merlin last month.
Spotify has yet to get Sony Music to the table. The streamer has been looking for labels to take a cut in their fees so Spotify has a path to profitability. A source said: âWeâre looking for a deal where both sides share in the risks and rewards.â Spotify is offering up more data and a greater share of guaranteed revenue. It currently gives 55 percent of all revenue back to the labels.
The labels do not want to be solely reliant on the big tech giants such as Apple, Google and Amazon for revenue.
Spotify has proven it is willing to be more flexible about launching new music on its paid tier instead of giving it away for free. Itâs also got a sizable lead on music streamers, with more than 50 million paid subscribers. Spotify confirmed it hired banks Morgan Stanley, Goldman Sachs and Allen & Co. to advise on an IPO.
Whether Spotifyâs big valuation can aid interest in Pandora remains to be seen.