Music streaming platform Spotify is reportedly offering advances and appealing business terms to independent artists in hopes of convincing them to license their music directly with the streaming music app instead of going through a third-party distribution service.
Spotify is offering artists two advantages: a bigger financial cut and ownership of their recordings. The deals, furthermore, are not exclusive, leaving the artists free to license their songs to other streaming companies, like Apple Music and Amazon.
Spotify typically pays a record label around 52 percent of the revenue generated by each stream, or play, of a given song. The label, in turn, pays the artist a royalty of anywhere from 15 percent to, in some cases, 50 percent of its cut. By agreeing to a direct licensing deal with Spotify, artists and their representatives are able to keep the whole payout.
“Licensing content does not make us a label, nor do we have any interest in becoming a label,” Mr. Ek said on the call. “We don’t own any rights to any music, and we’re not acting like a record label.