Apple Music Is Making It Hard For Spotify To Sign Big Artists

Apple Music is putting the squeeze on Spotify in the quest to sign big name artists, according to report from 9to5Mac.com.

Spotify is currently out of contract with all three major music companies. According to the report, Spotify’s contract with Universal Music Group has been up for more than a year, while its contract with Warner Music Group expired in early 2016, and the company’s agreement with Sony Music expired a few months back.

Users probably aren’t aware of this because the labels are still allowing Spotify to stream their music thanks to month-to-month contracts, but it could be having an impact on Spotify’s ability to obtain the streaming rights to exclusive music. Apple Music, which has about 15 million active users compared to Spotify’s 30 million, acquired the exclusive streaming rights to Frank Ocean’s new album “Blond,” and Apple Music has also locked up the exclusive streaming rights to Britney Spears’ upcoming “Glory” album too.

9to5Mac.com reports that Apple Music pays publishers about 13.5 to 15 percent of revenue, but that figure is “slightly lower” than what Spotify pays. However, Apple Music also pays publishers 58 percent of revenue, compared to Spotify’s 55 percent. The major labels now apparently want Spotify to match Apple Music’s numbers, but it might be difficult for the online music streaming service to do so, because the company posted a $194 million loss in 2015 on reported revenue of $2 billion.

It should be interesting to watch how the online streaming war between Spotify and Apple Music plays out.