Spotify and BMG have entered into a direct, multiyear US publishing licensing deal.
The companies said on Wednesday (October 8) that the deal is “designed to deliver greater value to songwriters and their teams”.
The agreement marks Spotify’s latest direct deal with a prominent music publisher operating in the US, and moves its agreement with BMG beyond the traditional CRB model in the market.
Spotify also signed a direct licensing deal with Kobalt covering the US last month and has inked direct publishing agreements with all three majors, including Sony Music, also last month.
Universal Music Publishing Group and Warner Chappell Music signed direct licensing deals with Spotify in January and February, respectively.
Like the other deals with UMG, Warner, Sony, and Kobalt, this new direct deal with BMG in the US moves beyond the traditional CRB model in the market.
What that means in terms of how payouts will change, Spotify said, is that remuneration resulting from the direct licensing deal, combined with the MLC payouts that publishers continue to receive from the blanket mechanical license, will result in higher royalties for songwriters than standalone payouts from MLC under the audiobook bundle treatment.
That audiobook ‘bundling‘ payment structure, which started in March last year, saw Spotify dramatically cut the rate of mechanical royalties paid to publishers and songwriters in the US.
In the press release issued on Wednesday, BMG and Spotify said that this agreement reflects the companies, “shared interest in building a direct relationship that ensures songwriters share more directly in the value created by their work”.
They added: “It’s a practical step toward a more flexible licensing model that better serves both publishers and their artists, ensuring BMG songwriters benefit more directly in the growth of streaming.”
“Our partnership with BMG advances that vision with renewed support for songwriters through a licensing model that will enhance how music is enjoyed on our platform.”
Alex Norström, Spotify
“At Spotify, we believe the future of music depends on stronger collaboration across the industry,” said Alex Norström, Co-President & Chief Business Officer, Spotify.
“Our partnership with BMG advances that vision with renewed support for songwriters through a licensing model that will enhance how music is enjoyed on our platform.”
“Working directly with Spotify helps us reinforce our mission to ensure songwriters are fairly represented and rewarded for their work.”
Thomas Coesfeld, BMG
Thomas Coesfeld, CEO of BMG said: “Working directly with Spotify helps us reinforce our mission to ensure songwriters are fairly represented and rewarded for their work.
“We’re pleased to agree on a progressive licensing model that reflects the real-world use of music across digital platforms and are excited to take our partnership to the next level as we continue to redefine what a modern music company can be.
“We applaud Spotify’s momentum and support their position on developing new AI protections. While we support the use of AI to enhance human creativity, these policies align with BMG’s philosophy and will help ensure that fair remuneration and protection of artists’ works remain non-negotiable.”
BMG also noted on Wednesday that its new deal with Spotify “serves as the latest step following BMG’s announcement in late-2023 that it was taking direct control of its digital business, enabling the company to manage its own relationships with streaming platforms to leverage data, improve artist services, and streamline operations for its substantial music catalog”.
The move saw BMG take its digital/streaming distribution business in-house, just two months after Thomas Coesfeld took charge of BMG as CEO.
Elsewhere at BMG, Monti Olson recently rejoined the company to lead Music Publishing operations in North America with plans to “drive new signings and catalog acquisitions”.
Speaking with MBW last month after the company published its H1 2025 results, Coesfeld explained that “music publishing will likely remain the primary income driver for our business, and we plan to allocate additional resources to our successful and diversified publishing operations”.
He added: “Signings, administration and buyouts remain strong engines of growth, especially as streaming expands globally. Our strength lies in our focused model — publishing and recordings — which gives us resilience and flexibility as the market evolves.”
Music Business Worldwide
