What’s that? It’s imminent-licensing-deal-renewal time for Spotify? You wouldn’t know it from interviews being given by the bosses of major labels. Or perhaps you would. “We have hundreds of thousands of tracks going back 100 years, so we have quite a lot of leverage. Do we want to take all our stuff off a major streaming platform? No… because we have an arrangement that’s working for both of us at the moment. But the next chapter, which might be in five years, who knows?”
That’s Sony Music’s CEO Rob Stringer talking to the BBC, and dropping some well-crafted quotes that are spreading quickly – including his thoughts on whether Sony could withhold some music in response to Spotify and Apple Music striking direct deals with artists.
“Could they do that? Probably. Would we have way of dealing with that? Probably,” said Stringer, although he also had some praise. “From our point of view, it’s all about timing. Maybe we will do something that will give us more control over distribution. But you can’t argue that in this particular chapter, Spotify [are] leading the way. They built a robust and futuristic distribution model.”
The headlines from follow-on coverage of the BBC interview are predictable. ‘Sony Music hints at future Spotify breakaway, shattering streaming as we know it’ being our favourite so far. It follows a similar flurry of over-excitable coverage of 7digital’s brief announcement of a B2B partnership with Universal Music last month, predicting its own Spotify rival.
Major labels could certainly launch their own streaming services, if they have the appetite for the costs (relevant information: Spotify spent €396m on R&D and €567m on sales and marketing in 2017; Pandora spent $154m on product development and $493m on sales and marketing). They can do more with streaming around their artists’ D2C operations – this is what the UMG / 7digital partnership is more about – and they can choose to work with one service over another in ways beyond catalogue: UMG’s Peaceful Music playlist with Apple Music, or the Sony-owned Ministry of Sound’s tie-up with the same service.
(If you’re wondering: yes, Ministry has just delisted its big-brand playlists from Spotify. They were there on Tuesday morning when we checked, with 273,000 followers for Dance Nation and 154,000 for R&B Mixtape. This morning they’re unlisted on the Ministry profile, although you can find them still via search – Dance Nation retains its followers, but has no tracks and has been renamed as DN, for example. So Ministry is clearly holding on to the potential for a return in the future, without having to start from scratch follower-wise.)
But the overriding fact remains that until it makes any kind of strategic sense for major labels to launch their own Spotify rivals – and the demise of Vevo’s owned-and-operated platforms is another reason for caution – any such hints are simply part and parcel of the public-negotiating tactics that are familiar to our industry. What’s as interesting this time round is Spotify’s willingness to push back, and indeed to throw its own weight around more at the negotiating table, bolstered by going public and its continued clout in terms of subscribers. Expect plenty more sabres to be rattled in public by both sides.
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