According to reports, Spotify, the online streaming platform has entered into a partnership deal with Sony Music. The exact figures for the business transaction is yet to be released but the figures could see Spotify affording a break in revenue which will be paid in royalties. The partnership agreement between the two organisations have not made it clear that such will be the case but the likelihood of such an agreement was extracted from the outcome of the first deal Spotify had with another music label this year.
April this year, Spotify made its first partnership deal for the year with a music label by going into partnership with Universal Music Group. The percentage that Spotify was initially supposed to pay for the royalties was 55% but after the deal was put in place, the royalty payment percentage dropped to 52%.
The deal with Sony Music remains its second largest deal with a music label this year. Although the streaming service platform isn’t stopping there; as it hopes to land another deal with another global music label – Warner Music Group. However, it is to be noted that no agreement has been put in place for the Warner Music Group (WMG) partnership.
You could imagine why the online streaming service that boasts 140 million active users is launching into different partnership deals with music labels. The basic reason is that despite the fact that Spotify offers a paid subscription service to its users over the years, Spotify have been losing profit.
This is the major reason why Spotify have put in different measures in order to make more profit and stay more grounded in its field. One of the measures taken by Spotify includes the launch of offline playback on the Spotify app on Samsung”s Gear G3 smartwatch. Another one of the measures taken by Spotify includes the launch of a shared music creation playlist on the Facebook Messenger app, which allows multiple friends to create a playlist together, and anyone on the chat can change some of the songs on the playlist at any point in time.