When Spotify goes public, labels are going to sell their shares in the company

Here’s a little secret that few people know: The major record labels have equity positions in Spotify.

That’s right: the labels responsible for making sure Spotify continues to lose hundreds of millions of dollars every quarter as a result of licensing regimes they imposed also own a piece of the company.

When Spotify goes public, all three major labels say they will share any profits from the sale of their stakes in Spotify with artists.

Sony, for example, owns 5.7% of the company. Whatever dollar amount that works out to when the IPO hits will be funnelled back to artists on the label. Well, at least some of it.

Universal and Warner have vowed to do the same.

Some questions still linger, though.

  • What, exactly, will those stakes be worth on the open market?
  • Will the majors share this windfall with the indies for whom they distribute music? (Those indie labels are calling on the majors to do the right thing.)

Expect a big hoo-hah and controversy when all this finally starts coming to pass.

Alan Cross

is an internationally known broadcaster, interviewer, writer, consultant, blogger and speaker. In his 30+ years in the music business, Alan has interviewed the biggest names in rock, from David Bowie and U2 to Pearl Jam and the Foo Fighters. He’s also known as a musicologist and documentarian through programs like The Ongoing History of New Music.

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