Spotify is reportedly offering advances and appealing business terms to independent artists in hopes of convincing them to license their music directly with the streaming music app instead of going through a third-party distribution service. Billboard reports that some of the company’s deals have promised artists and their management “several hundred thousand dollars as an advance fee for agreeing to license a certain number of tracks by their independent acts directly to Spotify.”

“In some cases,” Billboard says Spotify is offering a 50 percent cut of per-stream royalty rates. That’s less than the percentage major labels earn, but artists end up with a significantly smaller portion of those label royalties, so Spotify’s proposal could be enticing. Indie musicians often license their music to Spotify, Apple Music, and other services by using third-party distribution companies like TuneCore as the middle man. Spotify’s strategy also seeks to cut those distribution services out of the picture by allowing artists to license the same music that Spotify is getting to other platforms while “retaining full revenue” from those deals. There’s no exclusivity involved. Additionally, artists maintain ownership of their master recordings, which is rarely the case under label contracts.

It’s likely that Spotify is limiting these attractive licensing terms to popular indie acts for now, as negotiating with a large roster of artists would quickly get very complicated. And in an obvious sign that it’s seeking to avoid angering record label partners, Billboard notes that Spotify is discouraging artists from saying things like they’ve “signed” with the streaming music company. Many of Spotify’s agreements with record labels forbid the company from directly challenging them, according to the report. Thus, Spotify is pursuing independent musicians instead of trying to poach label talent.

Spotify’s executives have routinely touted labels as valuable and critical to an artist’s success. At Recode’s Code Conference last month, Spotify CEO Daniel Ek said “we have over 20,000 partners in total on the record label side, adding “I don't view us winning as equivalent to them losing.” Ek continued:

“The best labels that I see are service businesses. They partner very, very deeply with artists. They’re around. They help with A&R. They put them together with great producers. It’s more than just the actual marketing piece of it. It’s about booking shows, it’s about the right collaborations. There’s so many aspects of making it as an artist today. I don’t think any of that goes away.”

But Ek also made it clear that Spotify is in a prime position to change up the status quo. “I still think that there’s huge inefficiencies when you think about how hard it is for artists to break through,” Ek said. “The number one thing artists are asking for is ‘help me find an audience.’” He spoke of creating “more and more tools” for artists and managers to “create even more interesting business opportunities which makes their marketing budget more efficient.” It would also certainly help Spotify’s bottom line. “There’s a bigger opportunity for us to grow our pie,” Ek said. He kept saying Spotify could help labels become more efficient. But this news is likely to cause some tension all the same.