Spotify postpones IPO due to license deals with record labels

According to rumors, Spotify is considering postponing its planned IPO to have more time to adjust its revenue model. For example, better deals with record labels should first be closed, so that Spotify improves its financial position.

That’s what several anonymous sources say to TechCrunch. Spotify would consider postponing the IPO until 2018, although no final decision has been made yet. The advantage of a later IPO is that Spotify has time to first create a better revenue model. The company would also like to get its finances in order first. However, a company spokesperson declined to comment on the report.

Spotify has grown significantly in recent years and now has tens of millions of users who pay for a subscription every month. Due to the great popularity, the company believes it has a better negotiating position when concluding licensing deals with record companies, according to TechCrunch. The licensees receive a fee for every song played on Spotify, and the company will likely negotiate a lower amount in the future.

The IPO has been prepared for some time. Within the music streaming service, a valuation of between 11 and 13 billion dollars is expected, but this could increase if Spotify indeed improves its market position.