Business

Spotify to trade on NYSE

On-demand service will bypass in IPO

Headphones are seen in front of a logo of online music streaming service Spotify in this  February 18, 2014 illustration picture. REUTERS/Christian Hartmann/File Photo
Headphones are seen in front of a logo of online music streaming service Spotify in this February 18, 2014 illustration picture. REUTERS/Christian Hartmann/File Photo

Investors finally are getting a crack at the resurgent music business.

Spotify, owner of the world’s largest paid music service, plans to begin trading on the New York Stock Exchange this quarter, passing up a traditional public offering for what’s called a direct listing.

The debut will test whether investors are ready to buy into the music industry, which was left for dead just a few years ago.

Record industry sales have increased for three years in a row, thanks to the legions of consumers paying to listen on Spotify and Apple Music.

Their spending has far outstripped shrinking album sales in retail outlets and online stores such as iTunes, allowing the $15.7 billion global business to prosper again after years of decline. Analysts project revenue could more than double over the next decade.

Investors have few direct opportunities to tap this potential growth. All three major music companies are part of larger concerns or closely held.

Vivendi owns Universal Music, while Sony Music is part of the Japanese media and tech conglomerate, and billionaire Len Blavatnik owns Warner Music.

Music accounts for a small share of business for the industry’s biggest retailers, such as Apple and Wal-Mart Stores.

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Spotify built the most popular on-demand music service in the world, outflanking the largest technology companies, including Apple. The company has signed up more than 70 million subscribers, the company tweeted on Thursday, and is trying to prove a music service can prosper without being a vehicle to sell mobile phones or other products.

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