Music-streaming giant Spotify Technology SA
The more traditional sectors of the music industry stand to gain substantially from the stock market debuts of streaming companies like Spotify. Since Spotify made its public debut on April 3, observers have watched major record companies for their response. Three major labels - Sony Music, Universal Music Group, and Warner Music Group - each hold equity stakes in the Stockholm-based company, the result of a series of licensing negotiations between the record companies and Spotify in 2011.
The day after Spotify began trading on the NYSE, Sony Corp
Though Sony has remained quiet on the details of the deal, the company simultaneously announced that it expected to record a profit of 105 billion yen (approximately $986 million) in the first fiscal quarter.
In theory, Sony has agreed to share any net gain from the sale of its Spotify stock with its artists. The company released a statement reaffirming a vague promise to give its artists a cut of its Spotify profits: "Sony Music and the Orchard are committed to sharing with their artists and distributed labels any net gain they may realize from a sale of Sony Music's equity stake in Spotify. This is consistent with our previously announced policy."
Sony's immediate move to offload some of its Spotify shares has piqued interest in how the other major record labels plan to use their substantial stock holdings in the company. According to reports, Warner Music Group and Universal Music Group (EPA: VIV) both hold estimated 4% stakes in the streaming company. But neither Warner Music nor Universal Music Group has yet made any public moves toward selling off its shares. The CEO of Universal Music Group's parent company, Vivendi, recently affirmed that his company intends to keep its stake of Spotify, calling the streaming company "a strategic partner."