Music streamer Spotify and Warner Music Group (WMG) unveiled a brand new, multiyear settlement on Thursday that covers each recorded music and music publishing. Via the deal, which follows an identical settlement between Spotify and Common Music Group, the businesses mentioned they might “strengthen their joint dedication to artists, songwriters and followers, in addition to the expansion of the music ecosystem by means of revolutionary collaboration.”
Monetary particulars weren’t disclosed.
“WMG and Spotify will work collectively to form the way forward for audiovisual streaming and improve the worth of music,” the companions mentioned. “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.”
They added: “The settlement additionally builds on the businesses’ current alignment round ‘artist-centric’ royalty fashions that reward and defend the ability 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 international locations together with the U.S., reinforcing songwriters’ profit on this evolving panorama.”
Stated Daniel Ek, Spotify’s founder and CEO: “For Spotify, 2025 is a yr of accelerated execution, and our companions at Warner Music Group share our dedication to fast innovation and sustained funding in our main music choices. Collectively, we’re pushing the boundaries of what’s doable for audiences worldwide — making paid music subscriptions extra interesting whereas supporting artists and songwriters alike.”
WMG CEO Robert Kyncl advised analysts throughout a morning name in regards to the new Spotify deal: “We stay up for seeing the worth of music enhance as we drive progress by means of additional innovation, along with Spotify. It’s our more and more highly effective mixture of recorded music and music publishing rights that makes our repertoire important for any service.”
Kyncl provided few particulars on the brand new Spotify deal in response to analyst questions, however argued the brand new settlement would assist his firm develop its market share in tandem with digital service suppliers like Amazon, with whom Warner Music Group additionally has a partnership deal.
The brand new Spotify deal can also be a part of Warner Music’s general technique to maneuver towards wholesale pricing of its music content material with distributors, somewhat than simply be tied to royalties from and general revenues for digital service suppliers.
“We’re assured in our progress outlook for the longer term and for the business, and we’re actually pleased with our progress, each on the Amazon and Spotify offers, which set a brand new path for the place we’re headed,” he advised analysts in the course of the name.
Information of the Spotify deal got here as Warner Music unveiled its first-quarter outcomes Thursday, which noticed income falling 4.7 p.c to $1.66 billion, which fell in need of an analyst consensus for $1.69 billion in income. Internet earnings rose 25 p.c to $241 million, as forex trade positive aspects from the U.S. greenback strengthening in worth in opposition to key European currencies and an funding acquire lifted earnings.
Warner Music confronted forex trade headwinds in the course of the newest quarter as round 58 p.c of its general revenues are denominated in non-U.S. greenback currencies. And the worth of the American buck in opposition to European currencies rose markedly within the wake of the latest U.S. presidential election.
The earnings per share for the corporate got here to 45 cents, in opposition to a 30 cents prior-year EPS in the course of the newest quarter. File music income fell 6.9 p.c to $1.34 billion, partially because of the finish of a distribution settlement with BMG. That was offset by music publishing income rising 6.3 p.c to $323 million.
Digital income, a key metric for a serious label, fell 4 p.c to $873 million in the course of the newest quarter, in opposition to a year-earlier $908 million. Prime Warner Music roster artists embody Dua Lipa, Coldplay, Cardi B and Bruno Mars.
Kyncl additionally mentioned any doable impression on his label’s cope with TikTok as a query mark stays over the longer term possession of the ByteDance-owned social media app within the U.S. market. “Clearly there’s loads of uncertainty for themselves, but when you consider the publicity of a possible ban on our deal, there’s not a lot to fret about,” he advised analysts.
Kyncl added the longer term U.S. possession of the favored social video app, which has round 170 million American customers, is past his firm’s management. TikTok briefly went darkish within the U.S. simply earlier than a divestiture invoice was set to grew to become legislation in January. U.S. President Donald Trump subsequently signed an govt order that delayed any sale of TikTok within the U.S. for 75 days as talks on discovering an American purchaser continued.
