Christian P. Pewitt Blogs: Spotify, China's Tencent In Stake Swap Talks That Could Mean Lower Payments To Labels, Artists

Spotify is in talks with the the music arm of Chinese internet giant Tencent Holdings to swap 10% stakes in each other’s businesses ahead of their expected public market listings next year, according to the Wall Street Journal.

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A proposed deal between between Spotify and the music division of China's Tencent would align the two music streaming services in future licensing negotiations with major labels and music publishers, according to sources familiar with the matter.

The combined negotiating power of the globe's two most prominent music streamers could lead to lower payments for artists and labels in the future.

Both streamers are seeking to improve their position prior to individual public stock offers which are likely to come in the first half of 2018. The major music companies and indie aggregator Merlin must negotiate rates individually to avoid running afoul of US and EU anti-trust laws.

Spotify and Tencent have declined to comment.