Warner Music Group and Spotify have signed a brand new multi-year licensing deal.
And earlier than you ask… sure, sources have confirmed that it supersedes the ‘bundling’ cost construction that final 12 months noticed Spotify dramatically minimize the speed of mechanical royalties being paid to publishers and songwriters within the US.
Warner’s new settlement with SPOT follows an announcement from Common Music Group final month, which additionally included a brand new royalty settlement that overrode the prior mechanical royalties scenario within the States.
Explaining this all is difficult and type of will get in the way in which of reporting at the moment’s information, however only for factual completists, right here’s a brief model:
- In 2022 the US Copyright Board dominated on a set of statutory precepts (‘Phonorecords IV’) by which mechanical royalty funds from streaming providers to rightsholders have to be calculated;
- Inside these precepts was steerage on a decrease mechanical royalty charge for ‘bundled’ providers vs. ‘music-only’ providers;
- Spotify subsequently added audiobooks to its most important Premium music service. It then claimed this certified as a ‘bundle’ (i.e. audiobooks plus music) and subsequently entitled them to chop the mechanical royalty charge by way of which it paid pubcos and songwriters within the US;
- Common Music Group and Warner Music Group now every have new personal direct offers within the US with Spotify that override these statutory CRB guidelines going ahead. Nevertheless, inside these personal agreements, it’s understood that each music rights firms (a) Will proceed to acknowledge a distinction between ‘bundled’ and ‘music-only’ listeners on Spotify, but (b) Have considerably improved the mechanical royalty funds anticipated to circulate from SPOT.
- These personal, direct agreements are between Spotify and every music agency’s in-house publishing firms (Common Music Publishing Group and Warner Chappell Music), in each the US and different territories. As well as, Spotify has signed new world licensing agreements with every agency’s recorded music operations.
Phew.
A press launch asserting the brand new SPOT/WMG settlement at the moment reads: “The brand new deal will assist ship new fan experiences, a deeper music and video catalog, additional paid subscription tiers, and differentiated content material bundles.
“The settlement additionally builds on the businesses’ present alignment round ‘artist centric’ royalty fashions that reward and shield the facility of artists to draw and interact audiences.
“Importantly, the brand new publishing settlement introduces a direct licensing mannequin with Warner Chappell Music in a number of further nations together with the U.S., reinforcing songwriters’ profit on this evolving panorama.”
Robert Kyncl, CEO, WMG, stated: “This main settlement delivers new advantages for artists, songwriters, and followers, whereas unlocking additional collaboration that expands the music ecosystem. It’s a giant step ahead in our imaginative and prescient for better alignment between rights holders and streaming providers. Along with Spotify, we stay up for rising the worth of music, as we drive development, impression, and innovation.”
Daniel Ek, Spotify’s Founder and CEO, stated: “For Spotify, 2025 is a 12 months of accelerated execution, and our companions at Warner Music Group share our dedication to speedy innovation and sustained funding in our main music choices.
“Collectively, we’re pushing the boundaries of what’s attainable for audiences worldwide—making paid music subscriptions extra interesting whereas supporting artists and songwriters alike.”
It’s a busy day for Warner, which points its newest quarterly earnings announcement at the moment (February 6).
Earlier at the moment, Warner confirmed that it had acquired a majority stake in Tempo Music, in a deal believed to worth the latter firm at north of USD $450 million.Music Enterprise Worldwide
