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Do the major labels know something about spotify that wall street doesn't? / Music Business Worldwide

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The MBW Review offers our take on some of the music biz's biggest recent goings-on. This time, we consider what Sony Music and Warner Music's sale of over $1bn in combined Spotify stock means for Daniel Ek's service and the wider industry. The MBW Review is supported by Instrumental. Some are calling it ‘the billion-dollar pump and dump'.

In recent days, we've learned that Warner and Sony have jointly cashed in over $1bn of their Spotify shares – amounting to approximately 50% of Sony's stock holding and 75% of Warner's. On the one hand, there's a very good reason to believe Warner CEO Steve Cooper when he says: "This sale has nothing to do with our view of Spotify's future." Both Warner and Sony are not institutional investors by trade, and both know they have an accounting headache ahead of them when it comes to distributing these proceeds amongst artists and partner labels. So long as the price is right (and it definitely was), the sooner they sell stock, the less administrative pain they are bound to plunge themselves into.

Industry veteran Bob Lefsetz echoed many a Wall Street expert's thoughts yesterday, however, when he lambasted the majors' decision, calling it "short-term thinking". The stewards of the labels aren't thinking about tomorrow, just today," he said. Politely, I beg to differ: Sony, for one, is almost certainly thinking about tomorrow. Well, a few months' time, anyway.

READ THE FULL Music Business Worldwide ARTICLE