Spotify & Sony

WRITTEN BY: LIZ HUNTER

Over the past year, the use of online streaming outlets to listen to music has become more and more popular. With sources like Apple Music, Soundcloud and Spotify, consumers are now able to listen to their favorite tunes easier and quicker than ever before.

As of January 2011, Sony Music Entertainment and Spotify have a contract together put into place by a company called The Verge, a multimedia source that focuses on the advancements of massive mainstream technology. The 42-page contract was signed before Spotify launched in the U.S. and the two-year deal has ‘goals’ that Spotify must reach. According to The Verge‘s website, these ‘goals’ range from how much Spotify must pay in yearly advances to Sony, the subscriber goals that Spotify must hit, and how streaming rates are calculated.

The contract also outlines, “how Sony Music uses a Most Favored Nation clause to keep its yearly advances from falling behind those of other music labels, how Spotify can keep up to 15% of revenues ‘off the top’ from ad sales made by third parties, and the complex formula that determines how much labels get paid per stream,” according to The Verge‘s website.

SOURCES:
http://www.theverge.com/2015/5/19/8621581/sony-music-spotify-contract
http://www.theverge.com/about-the-verge
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