In March, Spotify began paying music publishers and songwriters a discounted royalty rate for streams on its premium tiers — and the music business isn’t accepting the change without a fight. Spotify says that by adding audiobooks to its premium offerings, these subscriptions have been reclassified as “bundles,” a type of plan that qualifies for a discounted rate on U.S. mechanical royalties given that multiple products are offered under one price tag.
Billboard estimated that this change will lead songwriters and publishers to earn about $150 million less in royalties for the first year bundling is in effect.
In response, a number of music organizations, including the Recording Academy, Association of Independent Music Publishers (AIMP), Nashville Songwriters’ Association International (NSAI) and more have made statements against the change. The NMPA was most vocal in condemning the move, calling it the end of “a period of relative peace” between the two parties.
Soon after, The Mechanical Licensing Collective (the MLC) retaliated with a lawsuit, saying that the premium tiers have been “improperly characterized” as bundles and that Spotify should revert to the previous rate structure.
To catch up on the music industry’s latest fight against Spotify, read Billboard’s updating timeline:
