>> Music streaming company Spotify is close to agreeing a new licensing pact with major label Warner Music, sources tell Reuters. The Swedish startup has grown in less than a decade into the world's most popular streaming music service. It's now valued at $13 billion. One of music's home to such artists as Ed Sheeran and Muse.
Rueter's media technology correspondent, Sophie Sassard says the clock is ticking for the streaming service.>> Spotify is under pressure from its creditors to go to the market to raise money, so that they can recoup part of their investment. Before they can do that, they first need to wrap up these licensing deals with the three majors, Sony, Universal and Warner Music.
They've done it with Universal and Sony, and so now the remaining guys are Warner Music. So if then they can now they can come to term with Warner, that would allow them to go to the market potentially by the end of the year.>> The parties have not yet agreed on the precise revenue split.
Spotify wants 50/50, but Warner Music's demanding it keeps at least 52% of the royalties. Basic Spotify services are free, and supported by advertising. Subscribers who pay, get unlimited, ad free listening. Spotify pays a share of royalties to record companies who then pass them on to artists.>> The music industry has been in recession for over a decade, and the streaming platform, like Spotify, have really helped revive the music industry.
But now as they grow, and they become more prominent, they're asking for more. So that's why there this ongoing fight around royalties.>> Warner's also pushing to receive a guaranteed upfront payment, regardless of subscription gross. Both parties are positive a deal could be signed by September.