Daniel Ek, the chief executive and co-founder of the free music service Spotify revealed on Tuesday that the service is planning to pay out $500 million to music copyright holders (usually record labels). According to Billboard, $500 million is equal to what Spotify has paid out “every other year combined” since they launched in 2008.
For comparison, Pandora paid $230.2 over a year according to their latest report, and VEVO has paid $200 million since its 2009 launch.
Although the relationship between Spotify and major labels has been a complicated one, Universal Music Group president of global digital business Rob Wells calls Spotify a “substantial” source of revenue. There are still a lot of details to be ironed out, but it’s looking like Spotify is figuring out how to work with the music industry instead of against it.