Report: Spotify Australia won’t be a record label

Major recording companies have been alarmed since June when it was reported that Spotify overseas is allegedly offering advances of up to several hundred thousand dollars, and appealing business terms, to independent artists in hopes of convincing them to license their music directly.

In the furious backlash, Spotify CEO Daniel Ek has calmed the waters down by saying the platform had no plans to itself become a record label.

The goal, he said, is to get “as much music on the Spotify platform as we possibly can.”

The same assurance was given by Spotify Australia’s managing director Jane Huxley in the Australian Financial Review this morning.

“We’ve always licensed music from whoever owns the rights,” Huxley said.

“Could be a major label, an artist, a venture capital fund. What we’ll never do is invest in and own recordings,”

She said the Australian operations will continue licensing music directly from some artists and will continue to “innovate on the supply side of music” and champion emerging unsigned artists.

At a time when record companies are pressing for streaming services to drop their free tiers and force users to pay subscriptions which would ultimately benefit their artists, Spotify globally has upset them by making free tiers more appealing with moves as building up listening libraries of up to 750 tracks and be able to skip ads.

Huxley told the AFR that 60% of Australia’s subscribers started out on free tiers, and such moves at the free tier were needed to grow the subscriber basis.

“We are extremely strong with millennials, but the next wave is those over-30s whom we have to convince to come over to streaming and to do it with Spotify,’ she said.

“The try-before-you-buy is so important for them because they have a high propensity to pay.

“We hear from so many parents who once they discover all the sleep music and white noise we offer, they’re like ‘here’s my 12 bucks a month’.”