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Spotify's Latest Offer To Labels: A 14% Lower Royalty Rate

Arrow_outline_green_downSpotify, YouTube and other music streamers are locked in tough re-negotiations with the major labels.  But for Spotify, the stakes are the highest. The largest music streamer, which loses millions of dollars quarterly, is planning an IPO this year.


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Spotify's latest offer to record labels marks an almost 14% reduction in payments, according to the Financial Times:  "Spotify made its latest offer before Christmas: it proposed cutting its royalty fees to about 52 per cent of sales from its current 58 per cent share — which at least one of the major record labels is warming to, according to people briefed on the negotiations."

In exchange for the lower tariff, the music labels are considering multiple concessions from Spotify, including stock, big upfront payments and increased restrictions on its free ad-supported music tier.