With 50 million paid subscribers, Spotify is currently leading the streaming wars race, but while the Stockholm-based service didn't get out in front of their competition by playing the exclusives game, their content acquisition strategy might soon change.
According to sources who spoke with TechCrunch, Spotify has discussed traditional record label-style deals with artists.
Musicians who cut these deals could get a cash advance in exchange for Spotify owning a percentage of their recording revenues.
Unlike Apple Music, who struck a deal with Chance The Rapper to exclusively stream Coloring Book for two weeks in exchange for $500,000, Spotify is looking to play the long game.
While it's likely any direct deal between Spotify and an artist would contain at least a limited, initial exclusive clause, by working themselves into the actual deal, Spotify would actually benefit from the material being made available on all streaming platforms. By owning a small percentage of recording revenues, Spotify would make money every time the artist's songs are played on Apple Music, TIDAL, etc...
For artists, an alignment with a streaming giant like Spotify would make all the sense in the world. With the added incentive of reaping a financial windfall down the line, Spotify would be highly motivated to showcase their own artists in their most popular playlists and on the Spotify 100 chart, increasing the visibility of a song and, in turn, its stream revenue.
Even without the need for physical distribution in 2017, if an artist wants to hear their music on the radio, signing to a major label is still the move. However, for artists who seek complete creative control and upfront funding, and who either don't make "radio records" or don't care about generating radio spins, striking a label-style deal directly with a streaming platform and cutting out the middleman (the label) completely is an attractive, alternative option.
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