Credit: Music Business Worldwide
The companies announced the agreement on Wednesday (October 8), stating that the deal is specifically “designed to deliver greater value to songwriters and their teams.” This highlights a shared goal of ensuring composers receive improved financial returns from streaming royalties.
Crucially, this agreement moves their collaboration beyond the customary Copyright Royalty Board (CRB) rate structure traditionally used in the US for mechanical licenses. By negotiating directly, BMG—one of the world’s most prominent music publishers—and Spotify can tailor terms that they believe are more beneficial than the statutory rates.
This pact is considered a key development because it demonstrates Spotify’s preference for direct negotiation with major publishers in the US. By bypassing the CRB framework, both BMG and Spotify gain flexibility, potentially resulting in better deals for BMG’s represented songwriters while also streamlining the licensing process for the streaming giant.
The completion of this multi-year, direct agreement reinforces the trend of major players in the music industry seeking personalized, market-driven licensing terms rather than relying solely on government-set rates.
About the Author
