According to some reports, Spotify has entered into an official partnership with Sony Music. There are no clear details right now on what the partnership terms are between both parties. However, it is quite possible that it could afford Spotify a break on the percentage of revenue to be paid in royalties. This is similar to the deal Spotify reached with Universal Music Group, where its royalty payment percentage reduced from 55 percent to 52 percent. Neither Sony Music nor Spotify has mentioned if this deal will include anything similar.
This is the second large deal for the popular streaming music service with a record label this year. Spotify also hopes to land yet another deal with Warner Music Group, though it is yet to reach an agreement with WMG. Remember that Spotify announced the deal with Universal Music group in April this year.
No, while the streaming service has been offering a paid subscription service for years, and is the most popular streaming service of all those that are offered, the company is still losing money. This is in spite of reaching 140 million monthly active users. Therefore, it is imperative for the company to make deals with record labels for them to become profitable again.
However, entering into partnerships is not the only way Spotify is trying to regain profitability status. The service has spent loads of time developing and launching new features and services for its streaming music service, which will seek to engage customers and uplift its current position in the market. Features like shared music playlist creation in Facebook’s Messenger app were launched at the end of June. This method allows users and their friends to create a playlist together, while also allowing anyone else in the chat to make changes and add songs at a moment’s notice, all from within the chat. Also, the company launched offline playback for the Spotify app on Samsung’s Gear G3 smartwatch.