@RobertBLevine_: Can Spotify Survive the Impending Storm As It Prepares to Go Public?

Another insightful post by the author of Free Ride!  We’re looking forward to Mr. Levine turning his attention to the racketeering at Facebook.

As Spotify begins to prepare for an IPO, which sources say the company is planning for late 2017, the relationship between the Swedish streaming giant and its trifecta of major-label frenemies (Universal Music Group, Sony Music Entertainment and Warner Music Group) is going through some drama.

Finding compromise is more important than ever for both sides. Spotify needs the majors’ vast catalogs and without long-term deals in place, it would be hard for the company to go public — which it essentially has to do in order to satisfy the terms of a financing deal.

Read the post on Billboard

@claireatki: Labels Said to be Trading Spotify Even Lower Royalty Rates for Windowing

Newly married Spotify Chief Executive Daniel Ek is coming around to the idea of compromise.

The streaming leader is discussing making some new music available only to paying subscribers in hopes of ending a months-long impasse with the major record companies, The Post has learned.

The recent change of heart for Ek — who said “I do” to Sofia Levander in lavish nuptials over the weekend in Italy’s Lake Como — stems from a desire to make Wall Street happy, sources said.

As part of its negotiations, Spotify wants to lower its revenue split and make its finances more attractive to potential investors.

Spotify wants to hand over less than 50 percent of its revenue to the labels, sources say. Right now, it pays them as much as 58 percent of revenue.

“There are two things being discussed — windowing and rates. It’s a bit of ‘we’ll compromise if you compromise,’ ” said a source familiar with talks. “They’re tech people and they want to get rich.”

Read the post on New York Post

Spotify IPO Watch: Dealmaking Down, UK Rates Unchanged

We think that a Spotify IPO will require very frothy market conditions.  Indicators will be higher oil prices (currently low), steady interest rates (currently under upward pressure in the US), high levels of “deals” (collapsing), and higher valuation for tech stocks (currently crashing led by Apple).

The Spotify IPO Watch Signal for May 2015 is RED–no IPO in the next six months and increased risk of Spotify defaulting on its $1 billion of convertible debt.

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Of the $5 trillion in transactions that were announced in 2015, almost 10 percent — $504 billion — have since been terminated. Wednesday was especially bad for bankers as two mergers valued at a combined $21 billion collapsed.

The latest cancelled deals mean 2015 has been stripped of its title as the biggest year for dealmaking, dropping to $4.06 trillion compared with 2007’s $4.09 trillion.

The companies and their bankers can blame themselves for some of the failures, said Ira Gorsky, an analyst with Jersey City, New Jersey-based Elevation LLC. Deals have grown so large, and in already consolidated industries, as to provoke the wrath of aggressive antitrust enforcers.

Read it on Bloomberg: Wall Street’s Dealmaking Goes From Boom to Bust in a Few Months

The Bank of England warned Thursday of big risks to Britain’s economy should voters opt in a June referendum to leave the European Union — a stark assessment from an institution known for being independent of political campaigns.

Members of the Monetary Policy committee said in a statement after deciding to keep interest rates on hold that a vote to leave the EU could prompt households and firms to delay spending, lowering demand for labor and causing unemployment to rise.

Read it on New York Times: Bank of England Warns About Risks of Exit From E.U.