Music streamer Spotify and Warner Music Group (WMG) unveiled a new, multi-year agreement on Thursday that covers both recorded music and music publishing. Through the deal, which follows a similar agreement between Spotify and Universal Music Group, the companies said they would “strengthen their joint commitment to artists, songwriters, and fans, as well as the growth of the music ecosystem through innovative collaboration.”
Financial details weren’t disclosed.
“WMG and Spotify will work together to shape the future of audio-visual streaming and enhance the value of music,” the partners said. “The new deal will help deliver new fan experiences, a deeper music and video catalog, further paid subscription tiers, and differentiated content bundles.”
They added: “The agreement also builds on the companies’ existing alignment around ‘artist-centric’ royalty models that reward and protect the power of artists to attract and engage audiences. Importantly, the new publishing agreement introduces a direct licensing model with Warner Chappell Music in several additional countries including the U.S., reinforcing songwriters’ benefit in this evolving landscape.”
Said Daniel Ek, Spotify’s founder and CEO: “For Spotify, 2025 is a year of accelerated execution, and our partners at Warner Music Group share our commitment to rapid innovation and sustained investment in our leading music offerings. Together, we’re pushing the boundaries of what’s possible for audiences worldwide – making paid music subscriptions more appealing while supporting artists and songwriters alike.”
WMG CEO Robert Kyncl told analysts during a morning call about the new Spotify deal: “We look forward to seeing the value of music increase as we drive growth through further innovation, together with Spotify. It is our increasingly powerful combination of recorded music and music publishing rights that makes our repertoire essential for any service.”
Kyncl offered few details on the new Spotify deal in response to analyst questions, but argued the new agreement would help his company grow its market share in tandem with digital service providers like Amazon, with whom Warner Music Group also has a partnership deal.
The new Spotify deal is also part of Warner Music’s overall strategy to move towards wholesale pricing of its music content with distributors, rather than just be tied to royalties from and overall revenues for digital service providers.
“We’re confident in our growth outlook for the future and for the industry, and we’re really happy with our progress, both on the Amazon and Spotify deals, which set a new direction for where we’re headed,” he told analysts during the call.
News of the Spotify deal came as Warner Music unveiled its first quarter results on Thursday, which saw revenue falling 4.7 percent to $1.66 billion, which fell short of an analyst consensus for $1.69 billion in revenue. Net income rose 25 percent to $241 million, as currency exchange gains from the U.S. dollar strengthening in value against key European currencies and an investment gain lifted earnings.
Warner Music faced currency exchange headwinds during the latest quarter as around 58 percent of its overall revenues are denominated in non-U.S. dollar currencies. And the value of the American greenback against European currencies rose markedly in the wake of the recent U.S. presidential election.
The earnings per-share for the company came to 45 cents, against a 30 cents prior year EPS during the latest quarter. Record music revenue fell 6.9 percent to $1.34 billion, in part due to the end of a distribution agreement with BMG. That was offset by music publishing revenue rising 6.3 percent to $323 million.
Digital revenue, a key metric for a major label, fell 4 percent to $873 million during the latest quarter, against a year-earlier $908 million. Top Warner Music roster artists include Dua Lipa, Coldplay, Cardi B and Bruno Mars.
Kyncl also discussed any possible impact on his label’s deal with TikTok as a question mark remains over the future ownership of the ByteDance-owned social media app in the U.S. market. “Obviously there’s a lot of uncertainty for themselves, but if you think about the exposure of a potential ban on our deal, there’s not much to worry about,” he told analysts.
Kyncl added the future U.S. ownership of the popular social video app, which has around 170 million American users, is beyond his company’s control. TikTok briefly went dark in the U.S. just before a divestiture bill was set to became law in January. U.S. President Donald Trump subsequently signed an executive order that delayed any sale of TikTok in the U.S. for 75 days as talks on finding an American buyer continued.
