Spotify is 'seriously considering' going public in 2017, but there's a twist

Spotify is "seriously considering" an unusual public listing of its shares, rather than a traditional IPO in which shares are sold to the public, sources told CNBC on Thursday.

Earlier, the Wall Street Journal reported that the music streaming service is considering a direct listing, in which the company would simply register its shares on a public exchange and let them trade freely.

With a typical initial public offering investors buy shares from the company prior to IPO. A direct listing differs in that investors buy shares off the open market, removing the need for underwriters to set the initial price.

The company will also no longer raise new money from investors, people familiar with the matter told WSJ. Spotify has raised over $1 billion dollars in equity and has been valued at $8.5 billion dollars, but the company is aiming to increase that value to $10 billion. Spotify's new deal with Universal Music Group, could bolster the streaming service's revenue and better position the company to compete against Apple music.

If Spotify's direct listing is successful, it could set the stage for other high-value tech companies to follow a similar path.

— CNBC's Leslie Picker contributed to this report