Could Spotify 'IPO' (without an IPO) as early as September?

COTD_4.5 music streaming revenue

In 2015, Spotify was valued at $8.5 billion.

Furthermore, "having a public stock would also give Spotify's investors and employees the opportunity to cash in their shares", it said.

Music streaming service Spotify is planning to go public this year, but a new report from The Wall Street Journal says the company isn't planning a traditional IPO.

"Starting today, Universal artists can choose to release new albums on premium only for two weeks, offering subscribers an earlier chance to explore the complete creative work, while the singles are available across Spotify for all our listeners to enjoy", Spotify chief executive and co-founder Daniel Ek said in a statement.

Spotify, in turn, can get a break on royalties if it hits certain targets, including some tied to new paying subscribers.

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In exchange, Spotify is getting a reduction in royalty rates.

Spotify still needs to broker long-term deals with Sony Music Entertainment, Warner Music Group and the independent label community.

The rumor mill is spinning that Spotify wants to go public in the near future, although the streaming giant has yet to demonstrate it can survive as a profitable company. And UMG, which accounted for 35.7 percent of the USA recorded-music market in the first quarter of 2017, according to Nielsen Music, often sets the pattern for the structure of digital deals.

The partnership promises to "provide UMG with unprecedented access to data, creating the foundation for new tools for artists and labels to expand, engage and build deeper connections with their fans".

The exclusivity model is the first major move towards converting users to paid, which, to no one's surprise, drives the vast majority of their revenue $10/month at a time. Whether Spotify or music labels can make sustainable profits off streaming is another question, but it's clearer than ever that this is the bed that's been made for them.

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