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Interview Synopsis

Spotify – publisher & master licence royalty rates

  • Public Equity
  • TMT
  • Europe

“In this industry, content is everything and money, obviously, talks”, a former manager from Spotify AB told Third Bridge Forum, while explaining the dynamics between labels, digital service providers and artists. The music industry differs from other media providers, in that “they don’t really believe in having exclusivities”.

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Spotify revenue streams: from CRB rate change to catalogue assets

When it comes to acquiring catalogues, there are varying approaches. “The bigger players with bigger wallets would like to acquire exclusivity deals with very global stars and the smaller players have to find other avenues in order to play a very competitive game on the marketplace.” 

The Copyright Royalty Board, a US organisation, has set the rate paid to publishers and songwriters to increase to 15.1% by 2022. “There are a few markets in the world where governmental bodies are actually having a say on the rates when it comes to publishing rates. For instance, [the] US is obviously one of them… The rest of the market, especially Europe, are not that regulated in the same sense.” They also explored whether other markets would follow the US’s suit with music streaming royalties.

The specialist was also asked if anything could be inferred from Universal’s acquisition of Bob Dylan’s entire catalogue. Although there’s a time threshold for such rights becoming public domain, “it’s a very, very lucrative asset to hold”. Indeed, “there are a lot of things happening in terms of M&A or the big players picking up smaller labels and distribution channels in order to have a more steady market share to present and monetise.”

Music streaming royalties – how labels interact with artists

On the topic of how artists and labels interact, the former Spotify manager explained how technology has squeezed the middlemen, as the cost of releasing and distributing music has “been plummeting through the ground”. This proves to be a double-edged sword for artists, making it harder to stand out from the crowd.

“The game is very much changing on the label side in terms of how they are dealing with the creative community, but at the same time, what most people are missing is that every day there are tens of thousands of products being released on the marketplace.” 

As well as Spotify revenue streams, the interview also covered podcasts and royalty-free music, as well as the benefits of distribution-only deals versus standard record deals.

To access all the human insights from Third Bridge Forum’s Spotify – publisher & master licence royalty rates Interview, click here to view the full transcript.

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