A Timeline of the Music Industry’s Bundling Feud With Spotify (Updating)
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:
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8/31/22: Phonorecords IV Settlement
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12/30/22: Judges OK Phonorecords IV
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10/3/23: Audiobooks Come to Spotify Premium
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3/1/24: Spotify Quietly Reclassifies Premium
March marks the first month that Spotify accounted to pay a discounted “bundle” rate for premium, duo and family plans. According to a lawsuit from the MLC: “On March 1, 2024, without advance notice to the MLC, Spotify unilaterally and unlawfully decided to reduce the Service Provider Revenue reported to the MLC for Premium by almost 50 percent.”
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4/3/24: Spotify Reported to Raise Prices
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5/9/24: Billboard Estimates $150M in Lost Royalty Value
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5/14/24: Songwriters and Publishers Speak Out
Various music publishing and songwriter organizations, including the Recording Academy, Association of Independent Music Publishers, and more begin to issue statements against Spotify’s move to pay songwriters and publishers less in U.S. mechanicals.
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5/15/24: NMPA Sends Cease and Desist for Unlicensed Lyrics, Video and Podcast Content
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5/16/24: The MLC Sues Spotify for Bundling
The MLC sues Spotify, alleging that the streamer has “improperly” classified its premium tiers as bundles.
