Spotify has been pressured for months to seal its legitimacy and sign up for a PRS for Music licence and SamKnows can now reveal that the hugely successful music streaming service has agreed terms with the UK body which represents music writers and publishers.
Although Spotify’s Chief Technology Officer, Andreas Ehn, would only coyly reveal last week that it was in negotiations with the London-based music group, a spokesperson for the PRS has confirmed today to SamKnows that terms have just been agreed and Spotify is now completely legitimate in the UK.
It would also appear that although the body is not ruling out pushing for back-dated payments it is mostly happy to welcome the overnight streaming sensation’s decision to go fully legitimate and not look backwards – a spokesperson pointed out that site was only ‘in beta’ and ‘getting going’ when it launched in the UK earlier this year.
With a PRS licence in place, Spotify will join Last FM which has led the way in obtaining agreements from thousands of individual artists and record labels to stream their music as well as reward the song writers and publishers through the PRS for Music licence.
Spotify’s negotiations with PRS for Music come as the body changes its licensing deal for sites which offer streaming. The body set rates for online music services two years ago and recently reviewed fees, keeping the same rates for downloads and subscription services.
However, as of July 1st, under the new Online Music Licence, the PRS is increasing the revenue share for sites running adverts and marketing activity around steamed music from 8% to 10.5%. At the same time, though, for streaming where there is no associated revenue from advertising, the fee per stream has been reduced from a quarter of a penny to a tenth of a penny.
PRS for Music reveals the new charges have been discussed with the music and online industries and clearly underline the move spearheaded by Last FM and Spotify for online and mobile services to monetise music through an ad-funded streaming model.
Certainly Spotify’s Andreas Ehn told SamKnows that it will be using advertising to become profitable within a year, however he will not be drawn on the sums involved after ‘negoations’ with both PRS for Music, which followed agreements with various record labels and aggregators.
“We can’t divulge too much about revenue shares, only to say that it’s based in part on click volumes and that we’re committed to compensating record companies and labels fairly,” he says.
“The music industry is losing money and is looking at new ways to create revenue streams, of which we are one. Music fans don't want to act illegally, but they want to have everything at their fingertips instantly. The best way to compete with that is to come up with a better product, which gives them everything music piracy can offer and much more besides, while also compensating the labels and artists.”