Sony Music Entertainment reached a licensing deal with Spotify this week, according to Billboard, in a deal that may set up the streaming service to go public.
The particulars of the agreement are unclear. However, Sony is the second major label to forge a new licensing deal with the popular streaming platform this year. (Universal Music Group announced a global, multiyear agreement with Spotify in April.) That puts additional pressure on Warner Music Group, the lone holdout remaining in the so-called “Big Three,” to make its own deal with Spotify.
Spotify, whose 50 million subscribers makes it the largest streaming service – Apple Music is a distant second with 27 million – is expected to go public in the near future. Last year, it raised $1 billion in convertible debt, which can be traded in for equity in Spotify once the company goes public.
Before the streaming service does that, however, it needs deals with the Big Three to assure potential public market investors that the music on the platform will not be disappearing anytime soon.
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SOURCE: Rolling Stone, Elias Leight