If Spotify ever has an IPO or gets acquired, Warner Music says it will share some of the money it makes with its artists.
Warner and other major labels own stakes in Spotify (and other streaming services), which they often snag during licensing deals.
This presents a bit of a problem, as some artists have claimed that these stakes compromise Warner’s negotiating position on things like artists payouts.
Since the labels own part of Spotify, they are basically getting paid on both ends if Spotify’s investors ever get to cash out. Artists, on the other hand, only get royalties. And currently those royalties are meager on services like Spotify.
On an earnings call, Warner Music CEO Steve Cooper seemed to address this concern.”Today we are confirming that in the event we do receive cash proceeds from the sale of these equity stakes, we will also share this revenue with our artists,” Cooper said, according to Re/code. So artists will benefit too, in theory — if Cooper’s position doesn’t change.
Cooper didn’t say how much of the proceeds would go to artists, except to note that it would be distributed in line with the payments services like Spotify already give. In other words, big artists will get paid more than little ones.
But how much any of them would actually get is unclear, and depends on a lot of factors we don’t know: how large Warner’s stake is, how much Spotify is worth at the time of its IPO, Warner’s financial situation, and, crucially, how generous Warner is feeling toward its artists when the time comes.
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