Spotify Files Papers For Its Entry To The Stock Market

The same labels it’s helping to save also hold Spotify’s fate in their hands, however. According to its filing, four companies — Universal Music Group, Sony Music, Warner Music Group and Merlin, which represents tens of thousands of independent record labels — control 87 percent of the music people listened to on the platform last year.

That concentration of power — what Spotify calls its “lack of control over the providers of our content and their effect on our access to music” — coupled with the extremely complex system around licensing and legally playing music, mean it’s not completely in control of its own fate. Compare this to a company like Netflix, which now drives its viewers toward films and shows it has created.

Just before the turn of the new year, Spotify was sued — not for the first time — for $1.6 billion over a failure to pay artists, over what it says is a complex system.

Wednesday’s filing also makes mention of some controversies in Spotify’s past. Recently, a scam based on a clever manipulation of robot-driven streams of fake music was alleged by Music Business Worldwide. The filing, among the many risks it lists, says: “… an individual might generate fake users to stream songs repeatedly, thereby generating revenue each time the song is streamed. … In 2017, we detected instances of botnet operators creating fake new User accounts seemingly for the above purposes.”

Similarly, last year the company was accused of hiring producers — at the time, what were called “fake artists” — to create music for its own (very popular) playlists in order to fulfill what it perceived as a demand from its customers. The filing mentions it may in the future “expend substantial financial resources on [among other things] … creating new forms of original content.”

The question, as ever, remains: What will the future hold?

CorrectionFeb. 28, 2018

This article and its headline originally mischaracterized the entry of Spotify’s stock into the public market — it will allow its privately held shares to be liquidated publicly, not generate an additional $1 billion in capital

Article Appeared @https://www.npr.org/sections/thetwo-way/2018/02/28/589627338/spotify-files-papers-for-a-1-billion-entry-to-the-stock-market

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