Spotify offering hefty advances to unsigned artists in return for distribution

Spotify is offering advances to select unsigned artists and their management in return for third-party distribution, Billboard has revealed.

This will put Spotify in direct competition with third-party distributors as CD Baby and TuneCore.

Previously, with iTunes, Apple preferred to work directly with TuneCore.

According to Billboard, Spotify has courted some the acts which are obviously streaming well on its platform, with some big advances.

“Under the terms of some of the deals, management firms can receive several hundred thousand dollars as an advance fee for agreeing to license a certain number of tracks by their independent acts directly to Spotify,” according to Billboard.

Spotify’s strategy is that the acts which sign up with them will retain their copyright, and hence can also work with other distributors.

But some acts are being offered 50% of the revenue per stream on those songs on Spotify.

By offering to pay the artists and management directly, Spotify is opening the door to a scenario where acts no longer have to sign deals with record labels.