Spotify and Warner agree to an ‘expanded’ global licensing deal

Today, Spotify and Warner Music Group announced in a short statement that the two entities have renewed their global licensing agreement. This news comes about two months after Spotify ended its “global food fight” with Warner / Chappell Music (Warner Music Group’s publishing arm), and the two entities inked a multi-territory licensing agreement.

“Spotify and Warner Music Group are pleased to announce a renewed global licensing partnership,” the joint statement reads. “This expanded deal covers countries where Spotify is available today, as well as additional markets. The two companies look forward to collaborating on impactful global initiatives for Warner artists and songwriters, and working together to grow the music industry over the long term.”

The rift between Spotify and Warner has been public over the past year, and it centered largely on Spotify’s 2019 expansion into India. Warner and Spotify couldn’t come to terms on a publishing agreement, so Spotify tried to use an obscure provision in India’s copyright law in order to obtain a statutory license for the catalog. Warner then took Spotify to Bombay’s high court, saying, “After months of negotiations, Spotify abruptly changed course and has falsely asserted a statutory license for our songwriters’ music publishing rights in India. We had no choice but to ask an Indian court for an injunction to prevent this.”

Although the spat appeared to be over the publishing rights for this one territory, it was actually a proxy for the renegotiations in Spotify and Warner Music Group’s global licensing deal. Spotify’s chief financial officer, Barry McCarthy, admitted as much in an interview. “It’s not really about India,” McCarthy said onstage at a Morgan Stanley conference. “It’s about leverage and renegotiation of the global agreement.”

Spotify launched in India without the Warner / Chappell Music catalog, which hosts many of the world’s biggest artists. But today’s deal will finally make Warner Music’s vast catalog — which includes acts like Cardi B, Bruno Mars, and Coldplay — available to Spotify users in India.

Aside from the argument over India, Financial Times recently said that a point of contention during negotiations involved Spotify’s push into podcasts. According to sources, music companies fear losing revenue share as the platform continues to diversify the types of content it offers. “They are constantly trying to chip away at that share of music on the platform,” one music executive told Financial Times. “Of course there is friction there.”

While financial details around Spotify and Warner Music Group’s deal were not disclosed, there’s no denying that streaming is increasingly integral to the health of major labels. Warner Music Group’s Securities and Exchange Commission filing from February 6th of this year states that streaming brought in a large chunk of the label’s revenue for the fiscal year 2019. “Recorded music revenue earned under license agreements with our top two digital music accounts, Apple and Spotify,” reads the filing, “accounted for approximately 30 percent of our total revenues.”

Spotify now holds long-term licensing agreements with two of the three major labels: Warner and Sony.

Source:- theverge