Spotify and BMG Announce New Licensing Deal Aimed at Boosting Songwriter Royalties
New York, NY – Spotify has reached a new licensing agreement with BMG, promising a “more flexible licensing model” and “greater value” for songwriters and their teams, the companies announced today. The deal comes amid ongoing scrutiny of streaming royalty rates and follows similar renegotiations with Sony music, Universal, Warner, Kobalt, and merlin.
The agreement seeks to address tensions that arose earlier this year when Spotify reclassified its Premium tier as a “bundle” after adding audiobooks, a move that resulted in an estimated $230 million cut to songwriter payments in the United States, according to the National music Publishers’ Association. This reclassification confirmed industry suspicions that streaming platforms can alter royalty structures to their advantage.
Under the new arrangement, spotify and BMG aim for a system that “better serves publishers and their artists.” BMG CEO Thomas Coesfeld stated the deal reinforces his company’s mission to ensure fairer rewards for songwriters and acknowledged Spotify’s recent progress on AI protections.
While the specifics of the royalty structure adjustments remain largely undisclosed, the deal signals a broader effort by Spotify to repair relationships strained by previous changes.However, industry observers note that a slightly higher payout doesn’t fundamentally address the imbalance between the financial benefits enjoyed by streaming platforms and the compensation received by music creators.
The agreement reflects a shift in strategy for streaming giants, moving towards managing perception and power thru negotiation rather then unilateral changes. the long-term impact on songwriters’ earnings and the overall digital music economy remains to be seen.
