Spotify to Pay Rights Holders $500 Million in 2013

It looks like the difficult relationship between Spotify and the music industry can expect brighter days. Daniel Ek, the chief executive and co-founder of the free music service, revealed on Tuesday at a technology and media event hosted by the Founders Forum in Los Angeles that Spotify is planning to pay out $500 million to music copyright holders, i.e. artists, labels, publishers and other. The amount equals to the total amount that the company had paid out since it launched its on-demand music streaming service in 2008. Competing music service Pandora paid $230.2 over a year according to their latest report, and VEVO has paid $200 million since its 2009 launch.

According to Universal Music Group president of global digital business Rob Wells, Spotify has been a “substantial” source of revenue, thus hinting at a potentially closer relationship with the streaming service in regards to forging new business models in a world where traditional distribution methods are eroding.