The listing on the New York Stock Exchange has seen the streaming giant secure a market capitalisation of $26.6 billion (£18.7bn), based on the April 12 closing share price.
Speaking in the latest issue of Music Week, Caswell stressed that music makers “created the assets which make Spotify and its rivals the [multi] billion dollar businesses they are today”.
Industry attention has focused on the major labels’ equity holdings and the distribution of any proceeds from sales of stock. Sony Music Entertainment immediately offloaded 17.2% of its holding and reported a net gain of 105bn yen (£698.4m) to the SEC. It was a move that means Sony’s stake – like those of Warner Music Group and Universal Music Group – now falls under the threshold of needing to be reported to financial authorities.
While Caswell said Spotify’s stock exchange launch “proves the extraordinary opportunities of our digital age”, she called for a fair return for artists and expressed concern about “rewards to the music value chain” from labels’ licensing deals incorporating equity.
But the artist community still has issues regarding transparency. The new European Music Manager Alliance (EMMA) was formed in response to developments with digital services such as Spotify and Facebook. EMMA's inaugural chairperson Keith Harris said the “distribution [of revenue] is something that is up for debate”.
Caswell said the distribution of proceeds to artists from equity sales will be a crucial moment for the streaming era.
“Now is the time for all labels and licensors to really demonstrate good intent for artists, ensuring that our ecosystem is sustainable in practice and principled throughout,” she said.
Spotify’s IPO has also prompted other streaming services to consider their options when it comes to going public.
The full statement from Lucie Caswell is below:
As the trading floor eyes up Spotify’s float, the attention of the music industry is on its licensors. None more so than music makers, who created the assets which make Spotify and its rivals, the billion-dollar businesses they are today. In theory, those assets are due for a windfall as option agreements become exercisable and paper value crystallises into cash. This is potentially a moment which proves the extraordinary opportunities of our digital age, the borderless, boundless bounty of music, the leadership of music innovation and, the enormous value in this business we love, music.
Whose value and how much however, is the conversation of the day. Spotify floating as the New York Stock Exchange takes a hit, is hopefully not prescient of the rewards to the music value chain, through rights-owners and rights licensors who included equity in their licensing deals. Premium-priced initial sales would suggest otherwise. Those licensing deals intrinsically exist for the protection and monetisation of copyright – the music rights and songs artists entrusted to those licensors, for the best advantage to achieve fans and revenues. Rights-holders, distributors, aggregators and services like Spotify, all make money from that transaction and, that trust. Surely it is only sound business that the trust will be repaid and the creators receive due reward from those valuable assets, when money is made. Whether marketing them, streaming them, building a business upon and around them or licensing them, this industry is sustained and sustainable only, with those songs and recordings.
How much value, will be a matter of the deal at hand and the hour at which the licensor cashes in (something which it seems, will be a tightrope dance of timing over the initial roller-coaster period of trading). From that point, the licensor must decide how to distribute the win across all of the assets it has licensed. Notice I say all. There is apparently some discussion of who should be included, of what repertoire may or may not feel the windfall and who is more valuable.
At this stage we point, as we have before, to the demonstrative WIN FairDigitalDeals Declaration. This landmark calling-card for fair play by rights-holders has come of age. Principle statements are now to become practice. This simple document, signed up to by a growing, global swathe of independent labels, is indicative of how good practice is the fair, transparent and creator-led business we strive for as the FAC. Good players are many but they also provide precedent that business can be done with equal revenue shares, clear reporting and by fit for purpose, full and fair distribution of wealth to those who create it. Now is the time for all labels and licensors to really demonstrate good intent for artists, ensuring that our ecosystem is sustainable in practice and principled throughout.