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Spotify just signed the last big music label deal it needs to go public

Now that it has Warner Music on board, look for a nontraditional IPO at the end of this year or early 2018.

Spotify CEO Daniel Ek standing onstage in front of a purple Spotify logo
Spotify CEO Daniel Ek
Michael Loccisano/Getty Images for Spotify
Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

Spotify has cleared what ought to be the last major hurdle before it goes public: It has renewed a licensing deal with Warner Music Group.

That means that Spotify now has deals in place with all three of the major music labels, and that means it will be able to tell investors that it has a grip on music costs for the next few years.

The streaming music service has for some time been planning on a nontraditional public offering, where it will just sell its shares directly to the public instead of going through Wall Street banks, and has been targeting a late 2017/early 2018 date.

Now it should be ready to go.

Warner announced the deal via social media. Here’s the Instagram version of the press release:

And here’s a quote from Stefan Bloom, Spotify’s chief content officer. This one was delivered via plain old email. “Our partnership with Warner Music Group will help grow the new music economy where millions of artists can instantly connect with fans, and millions of fans can instantly connect with artists.”

Spotify re-signed Universal Music Group, the world’s largest label, back in April. That deal set the template for Spotify’s other deals: It gave music labels and artists the ability to hold back some of their music, for a short time, from Spotify’s free service, while making it available to Spotify’s paid subscribers. In return, Spotify was able to negotiate lower rates from the labels.

Spotify re-signed Sony Music to a similar deal earlier this summer.

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