In March, Spotify began paying music publishers and songwriters a reduced royalty rate for streams on its premium tiers — and the music business isn't taking the change without a fight. Spotify says that by adding audiobooks to its premium offerings, those subscriptions have been reclassified as “bundles,” a type of plan that qualifies for a reduced rate on US engineering royalties since multiple products are offered at one price.
Advertising sign it is estimated that this change will result in songwriters and publishers earning about $150 million less in royalties in the first year it takes effect.
In response, several music organizations, including the Recording Academy, the Association of Independent Music Publishers (AIMP), the Nashville Association of Singers International (NSAI), and others have come out against the change. The NMPA condemned the move more strongly, calling it the end of a “period of relative peace” between the two sides.
Soon after, the Mechanical Licensing Collective (the MLC) hit back with a lawsuit, saying that the premium tiers are “accurately characterized” as bundles and that Spotify should revert to its previous pricing structure.
To learn about the music industry's latest battle against Spotify, read on Billboard schedule update:
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8/31/22: Phonorecords IV Settlement
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30/12/22: Judges OK Phonorecords IV
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10/3/23: Audiobooks are coming to Spotify Premium
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1/3/24: Spotify quietly reclassifies Premium
March marks the first month Spotify has paid a discounted “bundle” price for premium, duo and family plans. According to a lawsuit by MLC: “On March 1, 2024, without prior notice to MLC, Spotify unilaterally and unlawfully decided to reduce the Service Provider Revenue reported to MLC for Premium by nearly 50 percent.”
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4/3/24: Spotify reported to be raising prices
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5/9/24: Advertising sign An estimated $150 million in lost royalty value
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5/14/24: Songwriters and publishers speak out
Various music publishing and songwriter organizations, such as the Recording Academy, the Independent Music Publishers Association and others, are beginning to issue statements against Spotify's move to pay songwriters and publishers less in the US.
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5/15/24: NMPA Sends Cease and Desist for Unlicensed Lyrics, Videos and Podcast Content
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5/16/24: MLC Sues Spotify Over Bundling
MLC is suing Spotify, claiming the streamer has “misclassified” its premium tiers as bundles.
from our partners at https://www.billboard.com/lists/timeline-spotify-publishers-songwriters-bundling-feud/