According to a report by The Verge that Spotify is in talks with major music labels to negotiate substantial reductions in the royalty fees it pays — as well as extending rights so that it can roll out its free pricing tier to mobile devices.
According to “several music industry sources”, Spotify is already in negotiations with Warner Music about the changing fees and rights, and it will soon begin similar conversations with Sony and Universal. If the rumours are correct, successful negotiations could see Spotify nudge itself into profitability as well as offering a better service to its users. Win-win.
But if the rumours are true, then Spotify has a challenge ahead of it: the music industry is notoriously hard-nosed and Spotify already pays artists smaller royalty fees than the likes of Apple, Amazon and Google. But music downloads are slowing, so maybe now’s the time for Spotify to seize the opportunity and run with it.