Warner Music Group and Spotify have finalized an expanded multi-year licensing agreement, including a notable direct licensing model with Warner Chappell Music. This development follows Universal Music's recent similar arrangement with the streaming platform.

Key aspects of the new agreement include:

• New fan experiences and deeper music and video catalog
• Additional paid subscription tiers
• Differentiated content bundles
• Enhanced "artist centric" royalty models
• Direct licensing with Warner Chappell Music in multiple countries, including the U.S.

The partnership aims to address both companies' strategic objectives: Spotify's expansion into video content and the major labels' focus on subscription revenue growth. This comes at a crucial time as subscription growth plateaus and Spotify faces stagnant Individual subscriber numbers in the U.S.

During Warner Music's Q4 earnings call, CEO Robert Kyncl also announced:

• A new agreement with Amazon Music
• Plans for increased experimentation with streaming services
• Ongoing developments with Apple Music
• Commitment to protecting artist and songwriter rights as the "number one priority"

The agreement represents a significant shift in the music streaming landscape, particularly with Warner Chappell joining Universal Music Publishing Group in establishing direct licensing arrangements with Spotify. This move addresses concerns about streaming royalties for songwriters and publishers amid Spotify's bundling strategies.

The partnership is expected to create new opportunities for artists while protecting their rights and ability to engage with audiences effectively.

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