Sony new CEO Rob Stringer who replaced Doug Morris in the spring of this year shares his views.... 
Jimmy Iovine was right..streaming services ain't making no bread
“I have huge admiration for everything Spotify has done to build their business. We have a complicated relationship with it now because we have to make sure that we’re (SONY) represented properly and they don’t bypass us. There’s a temptation there, if they’re valued at what they’re supposed to be valued at, they could become larger than all the labels put together. It is my job to maintain the balance. We don’t control distribution and we are therefore not as much in control of our destinies as we were during the boom of CDs, or the explosion of vinyl in the ‘60s.”
*According to newspaper Computer Sweden, which has got hold of documents that Spotify send to the companies registration office in Luxembourg, the record companies bought the shares for 100,000 kronor (€9.700, $13.900).
The record labels are: Sony BMG (5,8 percent), Universal Music (4,8 percent), Warner Music (3,8 percent) and EMI (1,9 percent). Also Merlin holds a small stake.
*Spotify pays 70% of its revenue in royalties to the 3 major labels
*When Spotify launched in 2008, it had no power in the relationship since it had so few listeners. It needed to raise over $180 million in its first few years and pay the labels a huge upfront advance on royalty payments to convince them to let it launch in the US. Spotify also had to sell the labels equity so even if it succeeded, they’d be financially protected.
*In 2015 Spotify agreed to pay a $25 million advance for the two years of the contract: $9 million the first year and $16 million the second, with a $17.5 million advance for the optional third year to Sony Music. The contract stipulates that the advance must be paid in installments every three months, but Spotify can recoup this money if it earns over that amount in the corresponding contract year.
*Sony’s Most Favored Nation clause keeps those advances rising Where the MFN clause truly comes in handy for Sony Music is when it’s used in conjunction with section 5, the "annual true-up of advances" clause. This clause makes sure Sony Music’s yearly advances from Spotify are on par with the best deal negotiated by any other label based on the percentage of market share. That means if another music label is getting paid $1 million by Spotify for each percentage of market share it has, and Sony Music is getting $600,000 per market share percentage, Spotify must pay Sony Music the $400,000 difference — known as the adjusted contract period advance — at the end of each contract year.
This was Sony Music's contract with Spotify
https://www.google.com/amp/variety....er-interview-music-industry-trust-1202606222/
Jimmy Iovine was right..streaming services ain't making no bread
“I have huge admiration for everything Spotify has done to build their business. We have a complicated relationship with it now because we have to make sure that we’re (SONY) represented properly and they don’t bypass us. There’s a temptation there, if they’re valued at what they’re supposed to be valued at, they could become larger than all the labels put together. It is my job to maintain the balance. We don’t control distribution and we are therefore not as much in control of our destinies as we were during the boom of CDs, or the explosion of vinyl in the ‘60s.”
*According to newspaper Computer Sweden, which has got hold of documents that Spotify send to the companies registration office in Luxembourg, the record companies bought the shares for 100,000 kronor (€9.700, $13.900).
The record labels are: Sony BMG (5,8 percent), Universal Music (4,8 percent), Warner Music (3,8 percent) and EMI (1,9 percent). Also Merlin holds a small stake.
*Spotify pays 70% of its revenue in royalties to the 3 major labels
*When Spotify launched in 2008, it had no power in the relationship since it had so few listeners. It needed to raise over $180 million in its first few years and pay the labels a huge upfront advance on royalty payments to convince them to let it launch in the US. Spotify also had to sell the labels equity so even if it succeeded, they’d be financially protected.
*In 2015 Spotify agreed to pay a $25 million advance for the two years of the contract: $9 million the first year and $16 million the second, with a $17.5 million advance for the optional third year to Sony Music. The contract stipulates that the advance must be paid in installments every three months, but Spotify can recoup this money if it earns over that amount in the corresponding contract year.
*Sony’s Most Favored Nation clause keeps those advances rising Where the MFN clause truly comes in handy for Sony Music is when it’s used in conjunction with section 5, the "annual true-up of advances" clause. This clause makes sure Sony Music’s yearly advances from Spotify are on par with the best deal negotiated by any other label based on the percentage of market share. That means if another music label is getting paid $1 million by Spotify for each percentage of market share it has, and Sony Music is getting $600,000 per market share percentage, Spotify must pay Sony Music the $400,000 difference — known as the adjusted contract period advance — at the end of each contract year.
This was Sony Music's contract with Spotify
https://www.google.com/amp/variety....er-interview-music-industry-trust-1202606222/
