Spotify’s ‘Audiobook Bundle’ Isn’t a Feature — It’s a Royalty Rate Switch That Could Quietly Move $3.1 Billion Away From Songwriters
Spotify added 15 hours of audiobooks to Premium—then re-reported Premium as a “bundled subscription” to the MLC. In royalty math, that label can shrink the music revenue base that funds songwriters.
By TheMurrow Editorial
March 20, 2026
Key Points
- 1Track the timeline: audiobooks entered Premium in Nov. 2023, then Premium was reported as a “bundle” to the MLC on March 1, 2024.
- 2Understand the mechanism: “bundled subscription” status can trigger allocation formulas that shrink the music revenue base used to calculate U.S. mechanical royalties.
- 3Follow the stakes: NMPA claims $230M first-year losses and projects over $3.1B through 2032; a judge dismissed the MLC case in Jan. 2025.
Spotify didn’t need to raise prices to change what it pays songwriters.
All it needed was a new label.
A perk in the app—then a switch in the royalty math
On November 8, 2023, Spotify began offering “Audiobooks in Premium” in the U.S.: 15 hours per month of audiobook listening for Premium Individual subscribers, plus Family and Duo plan managers, drawn from a catalog Spotify said was 200,000+ titles (later described as 250,000+). For many listeners, it felt like a simple perk—an extra lane inside the same app.
Then, on March 1, 2024, Spotify made a move that turned a product announcement into a royalty fight: it began reporting Premium to the Mechanical Licensing Collective (MLC) as a “Bundled Subscription Offering.” Under U.S. rules for mechanical royalties on musical compositions, “bundle” isn’t marketing language. It’s a switch that can change the math.
Music publishers and songwriters’ advocates claim the result is stark: lower mechanical royalties, delivered through an accounting reclassification that doesn’t meaningfully change the music service most subscribers use. Spotify argues the opposite—that audiobooks are a distinct product of more than token value, and the regulations allow the bundle approach. A federal judge agreed at the pleading stage, dismissing the MLC’s lawsuit on January 29, 2025.
The real story isn’t whether audiobooks “count.” The story is what happens when platform product design becomes rate design—and when the definition of a “bundle” turns into a lever worth billions.
Then, on March 1, 2024, Spotify made a move that turned a product announcement into a royalty fight: it began reporting Premium to the Mechanical Licensing Collective (MLC) as a “Bundled Subscription Offering.” Under U.S. rules for mechanical royalties on musical compositions, “bundle” isn’t marketing language. It’s a switch that can change the math.
Music publishers and songwriters’ advocates claim the result is stark: lower mechanical royalties, delivered through an accounting reclassification that doesn’t meaningfully change the music service most subscribers use. Spotify argues the opposite—that audiobooks are a distinct product of more than token value, and the regulations allow the bundle approach. A federal judge agreed at the pleading stage, dismissing the MLC’s lawsuit on January 29, 2025.
The real story isn’t whether audiobooks “count.” The story is what happens when platform product design becomes rate design—and when the definition of a “bundle” turns into a lever worth billions.
Spotify didn’t need to change the music. It changed the category.
— — The Murrow Take
At a glance
Spotify added audiobooks to Premium in November 2023.
On March 1, 2024, it began reporting Premium as a “Bundled Subscription Offering” to the MLC.
Publishers say that reclassification lowers mechanical royalties; Spotify says it’s permitted because audiobooks have “more than token value.”
On March 1, 2024, it began reporting Premium as a “Bundled Subscription Offering” to the MLC.
Publishers say that reclassification lowers mechanical royalties; Spotify says it’s permitted because audiobooks have “more than token value.”
Spotify’s Audiobook Bundle: What Actually Changed (and When)
Spotify’s audiobook push arrived in a sequence that matters. The timeline is the spine of the dispute, because the controversy isn’t about the existence of audiobooks—it’s about when Spotify decided audiobooks altered the nature of Premium for royalty purposes.
The November 2023 launch: audiobooks enter Premium
On November 8, 2023, Spotify announced “Audiobooks in Premium” in the U.S. The offer was specific:
- 15 hours/month of audiobook listening
- Available to Premium Individual subscribers
- Also available to Family/Duo plan managers
- From a catalog Spotify described as 200,000+ titles (later 250,000+)
From a product perspective, Spotify was doing what tech platforms do: increasing the perceived value of a subscription without necessarily increasing the sticker price. Listeners got more content; Spotify got another reason to keep users from churning.
- 15 hours/month of audiobook listening
- Available to Premium Individual subscribers
- Also available to Family/Duo plan managers
- From a catalog Spotify described as 200,000+ titles (later 250,000+)
From a product perspective, Spotify was doing what tech platforms do: increasing the perceived value of a subscription without necessarily increasing the sticker price. Listeners got more content; Spotify got another reason to keep users from churning.
15 hours/month
Audiobook listening included for eligible U.S. Premium subscribers at launch (Premium Individual plus Family/Duo plan managers).
200,000+ → 250,000+
Spotify’s stated U.S. audiobook catalog size for “Audiobooks in Premium,” later described as even larger.
March 1, 2024: the “bundle” designation arrives
The pivotal date is March 1, 2024. According to court filings, Spotify began reporting Premium as a “Bundled Subscription Offering” to the MLC, the entity responsible for administering many mechanical royalties under the U.S. Section 115 blanket license.
That same day, Spotify launched a separate plan called “Audiobooks Access.” Even without getting into price points (not provided in the research), the existence of a separately described audiobook plan helps explain Spotify’s posture: audiobooks aren’t a minor feature, Spotify suggests; they are a discrete product category with standalone meaning.
That same day, Spotify launched a separate plan called “Audiobooks Access.” Even without getting into price points (not provided in the research), the existence of a separately described audiobook plan helps explain Spotify’s posture: audiobooks aren’t a minor feature, Spotify suggests; they are a discrete product category with standalone meaning.
Key Insight
In U.S. mechanical royalty rules, “bundle” is not a vibe—it’s a classification that can change how subscription revenue gets allocated to music.
Why international expansion matters
Spotify’s later international moves reinforce that posture. Spotify continued expanding audiobook inclusion and add-ons in other markets—such as 12 hours/month in some European countries, and Audiobooks+ add-ons introduced in multiple countries on July 16, 2025.
For readers, the point isn’t the exact number of hours. The point is intent: Spotify is building audiobooks as a paid listening format alongside music, not as a novelty. In a royalty dispute, intent becomes argument.
For readers, the point isn’t the exact number of hours. The point is intent: Spotify is building audiobooks as a paid listening format alongside music, not as a novelty. In a royalty dispute, intent becomes argument.
In streaming, the subscription is the product—and the definition of the subscription is the negotiation.
— — The Murrow Take
“Not a Feature”: How Bundling Can Lower Mechanical Royalties
The fight centers on a kind of royalty many listeners never think about: mechanical royalties for musical compositions—the money owed to songwriters and music publishers for the use of the underlying composition (not the sound recording).
In the U.S., interactive streaming services typically handle these composition/mechanical payments through the Mechanical Licensing Collective (MLC) under the Section 115 blanket license regime. The master recording side—labels and artists—is a separate ecosystem. The dispute here is about the composition side.
In the U.S., interactive streaming services typically handle these composition/mechanical payments through the Mechanical Licensing Collective (MLC) under the Section 115 blanket license regime. The master recording side—labels and artists—is a separate ecosystem. The dispute here is about the composition side.
The regulatory hinge: “bundle” and “more than token value”
Under the governing regulations, a subscription can be treated as a bundle if it combines interactive music streaming with another product or service of “more than token value.” The definition appears in the Code of Federal Regulations (37 C.F.R. § 385.2), and the consequence is practical: once a subscription qualifies as a bundle, the service can use an allocation formula based on standalone prices to determine what portion of the subscription revenue is attributed to music.
If the portion attributed to music shrinks, the base used to calculate mechanical royalties can shrink too.
The central criticism from publishers is not that Spotify can’t sell audiobooks. The criticism is that Spotify effectively re-labeled what users experienced as Premium—adding an audiobook benefit—and then used that benefit to justify a royalty-reducing accounting method.
If the portion attributed to music shrinks, the base used to calculate mechanical royalties can shrink too.
The central criticism from publishers is not that Spotify can’t sell audiobooks. The criticism is that Spotify effectively re-labeled what users experienced as Premium—adding an audiobook benefit—and then used that benefit to justify a royalty-reducing accounting method.
Why the “feature vs. product” framing matters
The law doesn’t care whether listeners personally use audiobooks. It cares whether the bundled component has more than token value and whether the service qualifies as a bundle under the rules.
That’s why the argument becomes philosophical as much as financial: Are audiobooks a materially separate product integrated into Premium, or are they a cleverly priced add-on introduced to unlock a more favorable royalty computation?
Spotify’s legal stance—later validated at the dismissal stage—leans into the “separate product” view. Critics lean into the “thin reclassification” view. Both positions can sound plausible until you realize the stakes.
That’s why the argument becomes philosophical as much as financial: Are audiobooks a materially separate product integrated into Premium, or are they a cleverly priced add-on introduced to unlock a more favorable royalty computation?
Spotify’s legal stance—later validated at the dismissal stage—leans into the “separate product” view. Critics lean into the “thin reclassification” view. Both positions can sound plausible until you realize the stakes.
A bundle isn’t a playlist. It’s a formula.
— — The Murrow Take
The MLC Lawsuit: What Songwriters’ Advocates Alleged
The MLC v. Spotify case put the issue into formal language: did Spotify’s March 2024 reclassification cause underpayment?
The MLC’s core allegation: same service, new reporting
The MLC alleged that Spotify’s shift to bundle reporting in March 2024 led to underpayment of mechanical royalties. The complaint emphasized Spotify’s first-time reporting of Premium as a bundle and argued that Premium’s content and functionality “remains the same,” despite the new designation.
The key rhetorical move is “remains the same.” If the service functionally stays constant for most subscribers, the MLC’s theory goes, then the reclassification looks less like a recognition of new value and more like a strategy to reduce what is attributed to music revenue.
The key rhetorical move is “remains the same.” If the service functionally stays constant for most subscribers, the MLC’s theory goes, then the reclassification looks less like a recognition of new value and more like a strategy to reduce what is attributed to music revenue.
What the case is—and isn’t—about
The dispute is easy to misread as a referendum on audiobooks, or on whether Spotify is “anti-songwriter.” The pleadings frame something narrower:
- The MLC’s claim targets how Spotify calculated and reported mechanical royalty obligations under the bundle framework.
- The fight centers on the allocation of subscription value between music and audiobooks.
- The case concerns the composition side of royalties, not the master recording side.
The MLC’s position aligns with longstanding tension in streaming: platforms bundle more and more value into subscriptions, while rights holders want that value counted—rather than used to discount the music component.
- The MLC’s claim targets how Spotify calculated and reported mechanical royalty obligations under the bundle framework.
- The fight centers on the allocation of subscription value between music and audiobooks.
- The case concerns the composition side of royalties, not the master recording side.
The MLC’s position aligns with longstanding tension in streaming: platforms bundle more and more value into subscriptions, while rights holders want that value counted—rather than used to discount the music component.
Spotify’s Defense—and Why a Federal Judge Dismissed the Case
Spotify’s position, as reflected in court records and secondary coverage, is direct: audiobooks are distinct from music and have more than token value, so Premium qualifies as a bundle under the rules. If the regulations permit the bundle approach, Spotify argues, then Spotify can report and pay accordingly.
The “more than token value” argument
Spotify’s defense isn’t simply that audiobooks exist. It’s that audiobooks constitute a meaningful subscription component that can stand as an actual product category—especially given the size of the catalog and the structure of access (hours per month rather than unlimited listening).
Spotify’s timeline helps the argument. The company didn’t tuck away a handful of public-domain recordings and call it “books.” It announced hundreds of thousands of titles and positioned audiobooks as a core listening format inside Premium.
Spotify’s timeline helps the argument. The company didn’t tuck away a handful of public-domain recordings and call it “books.” It announced hundreds of thousands of titles and positioned audiobooks as a core listening format inside Premium.
January 29, 2025: Judge Analisa Torres dismisses
On January 29, 2025, Judge Analisa Torres of the Southern District of New York dismissed the MLC lawsuit at the motion-to-dismiss stage. At a minimum, the dismissal signaled that Spotify’s interpretation of the bundling rules was viable enough to defeat the pleadings.
Secondary coverage noted that the MLC considered an appeal after the dismissal. Spotify’s own SEC filings, according to reporting, acknowledged ongoing risk if an appeal occurred—an important reminder that “dismissed” doesn’t always mean “ended forever,” especially in high-stakes regulatory interpretation fights.
Secondary coverage noted that the MLC considered an appeal after the dismissal. Spotify’s own SEC filings, according to reporting, acknowledged ongoing risk if an appeal occurred—an important reminder that “dismissed” doesn’t always mean “ended forever,” especially in high-stakes regulatory interpretation fights.
What dismissal means for readers
A dismissal at this stage doesn’t certify that everyone likes the outcome. It means the court did not accept the complaint as pleaded as a basis to proceed. For publishers and songwriters, that’s a setback. For Spotify, it’s validation that product structuring can be a legal strategy.
The $3.1 Billion Claim: What It Measures—and What It Doesn’t
If you’ve seen the number $3.1 billion, it likely came with a familiar framing: Spotify’s bundling move could cost publishers an enormous sum over time. The key is to treat that figure with the care it demands.
Where $3.1 billion comes from
The National Music Publishers’ Association (NMPA) projected that Spotify’s bundling practices could cost publishers “over $3.1 billion” through 2032. The statement was made by Danielle Aguirre, NMPA EVP & General Counsel, at the NMPA 2025 Annual Meeting on June 11, 2025, and reported by Music Business Worldwide.
NMPA also cited a first-year impact: Aguirre said Spotify’s move had, “by Spotify’s own numbers,” resulted in a $230 million loss for publishers during the first year.
Those are two critical statistics with different roles:
- $230 million: an asserted near-term loss figure tied to the first year after implementation.
- $3.1 billion through 2032: a long-range projection extending into the next major rate horizon.
NMPA also cited a first-year impact: Aguirre said Spotify’s move had, “by Spotify’s own numbers,” resulted in a $230 million loss for publishers during the first year.
Those are two critical statistics with different roles:
- $230 million: an asserted near-term loss figure tied to the first year after implementation.
- $3.1 billion through 2032: a long-range projection extending into the next major rate horizon.
$230 million
NMPA’s claimed first-year publisher impact from Spotify’s bundling move, attributed to Spotify’s own numbers (per NMPA).
$3.1 billion
NMPA’s projection of publisher losses “over $3.1 billion” through 2032 if the bundling approach persists.
How readers should interpret the number
The $3.1 billion figure is an advocacy estimate, not a neutral audit. It depends on assumptions: subscriber growth, pricing behavior, how the allocation formula is applied, and whether Spotify’s approach persists for years.
Still, the projection is useful because it signals what publishers believe is at stake: not a minor accounting dispute, but a structural shift that could echo through the next Copyright Royalty Board rate period often referred to as Phonorecords V (2028–2032).
In other words, publishers see bundling not as a one-off loophole, but as a precedent.
Still, the projection is useful because it signals what publishers believe is at stake: not a minor accounting dispute, but a structural shift that could echo through the next Copyright Royalty Board rate period often referred to as Phonorecords V (2028–2032).
In other words, publishers see bundling not as a one-off loophole, but as a precedent.
A Real-World Example: How a “Bundle” Rewrites the Subscriber Dollar
Royalty disputes can sound abstract until you map them onto a familiar moment: paying for a subscription that quietly becomes more than one thing.
Consider what Spotify Premium looked like to many consumers before audiobooks: pay a monthly fee, get music without ads, download tracks, play on demand. Now insert a new benefit—15 hours/month of audiobooks—with a catalog measured in the hundreds of thousands.
If Premium is treated as “music-only,” then the full subscription revenue is typically considered music subscription revenue for purposes of mechanical royalty calculations (subject to the applicable regulatory machinery). If Premium is treated as a bundle, the service can use a formula to allocate some portion of that monthly fee away from music and toward audiobooks.
Consider what Spotify Premium looked like to many consumers before audiobooks: pay a monthly fee, get music without ads, download tracks, play on demand. Now insert a new benefit—15 hours/month of audiobooks—with a catalog measured in the hundreds of thousands.
If Premium is treated as “music-only,” then the full subscription revenue is typically considered music subscription revenue for purposes of mechanical royalty calculations (subject to the applicable regulatory machinery). If Premium is treated as a bundle, the service can use a formula to allocate some portion of that monthly fee away from music and toward audiobooks.
Why this matters even if you never press play on an audiobook
Bundling rules don’t ask whether you personally used the bundled feature. They ask whether the product includes a non-music component of more than token value and how standalone prices inform allocation.
That’s why publishers argue the change is effectively a royalty-rate switch disguised as a feature improvement. From that perspective, a subscriber who never listens to a single audiobook could still be part of a pool where less revenue is attributed to music.
Spotify would counter that consumer usage isn’t the standard; the product is. If Premium includes audiobooks, Premium is no longer purely a music subscription.
Both arguments have logic. The tension is that the economics hit creators, while the product shift is framed as consumer value.
That’s why publishers argue the change is effectively a royalty-rate switch disguised as a feature improvement. From that perspective, a subscriber who never listens to a single audiobook could still be part of a pool where less revenue is attributed to music.
Spotify would counter that consumer usage isn’t the standard; the product is. If Premium includes audiobooks, Premium is no longer purely a music subscription.
Both arguments have logic. The tension is that the economics hit creators, while the product shift is framed as consumer value.
What “bundle” changes in practice
- ✓Music-only classification: subscription revenue is typically treated as music subscription revenue for mechanical royalty calculations.
- ✓Bundle classification: an allocation formula can attribute some subscription value away from music and toward audiobooks.
- ✓Creator impact: if the attributed music portion shrinks, the mechanical royalty base can shrink too.
What It Means for Listeners, Creators, and the Future of Subscription Media
This dispute should matter to readers who care about how culture gets financed—and to anyone trying to understand the next phase of subscription platforms.
For listeners: “more value” can have invisible tradeoffs
From a consumer standpoint, bundling often feels like a gift: more content, one bill. Yet in the rights economy, bundling can also become a mechanism for reallocating revenue between categories.
That doesn’t mean listeners should reject bundles. It means listeners should recognize that “included” doesn’t mean “free,” and it doesn’t mean “neutral.”
That doesn’t mean listeners should reject bundles. It means listeners should recognize that “included” doesn’t mean “free,” and it doesn’t mean “neutral.”
For songwriters and publishers: the risk is precedent
If one of the largest subscription services can include a substantial non-music product inside Premium and then treat the subscription as a bundle for mechanical royalties, others could follow. The worry isn’t just Spotify. It’s the template.
NMPA’s projected $3.1 billion through 2032 frames bundling as a multi-year economic drag. Even if one disputes the number, the strategic concern stands: once bundling becomes the default classification for premium music subscriptions, the baseline economics of streaming compositions can shift downward.
NMPA’s projected $3.1 billion through 2032 frames bundling as a multi-year economic drag. Even if one disputes the number, the strategic concern stands: once bundling becomes the default classification for premium music subscriptions, the baseline economics of streaming compositions can shift downward.
For Spotify: product diversification meets regulatory opportunity
Spotify has spent years expanding beyond music—podcasts, audiobooks, and other audio formats. From a business perspective, bundling is an elegant way to make the subscription feel richer while also formalizing new categories.
Spotify’s legal win at the dismissal stage suggests courts may be receptive to the idea that a multi-format subscription is legitimately a bundle, not a trick. Yet the public fight signals reputational risk, especially with songwriter communities that already view streaming payouts as thin.
Spotify’s legal win at the dismissal stage suggests courts may be receptive to the idea that a multi-format subscription is legitimately a bundle, not a trick. Yet the public fight signals reputational risk, especially with songwriter communities that already view streaming payouts as thin.
Practical takeaways
For industry readers tracking the implications, a few points stand out:
- Watch product definitions as closely as price changes. Small additions can change legal classification.
- Mechanical royalties are sensitive to revenue attribution. The fight is about the base, not just the rate.
- Bundling disputes will multiply as platforms package video, books, games, and audio together.
- Court outcomes may turn on regulatory wording (“more than token value”) rather than moral arguments.
- Watch product definitions as closely as price changes. Small additions can change legal classification.
- Mechanical royalties are sensitive to revenue attribution. The fight is about the base, not just the rate.
- Bundling disputes will multiply as platforms package video, books, games, and audio together.
- Court outcomes may turn on regulatory wording (“more than token value”) rather than moral arguments.
Editor's Note
This dispute isn’t about whether audiobooks are good or bad. It’s about how subscription design can reshape the royalty base without a headline price change.
The Murrow Take: Bundles Are Becoming the New Royalty Battlefield
Spotify’s audiobook move is easy to describe as consumer-friendly. Fifteen hours a month of books inside your music subscription sounds like a perk because, from the listener’s chair, it is.
From the songwriter’s chair, the same perk can look like a lever.
The MLC lawsuit made the conflict legible: a service can change what it pays not only by renegotiating rates, but by redefining the subscription itself. Judge Analisa Torres’s January 2025 dismissal gave Spotify room to keep using the bundle approach—for now—while publishers and advocates weigh what comes next.
NMPA’s warning—$230 million in the first year, over $3.1 billion through 2032—may ultimately prove too high, too low, or simply unprovable without deeper data. Yet the argument underneath is already shaping the industry: when platforms expand into adjacent media, they aren’t just adding content. They’re adding bargaining power.
Streaming’s next era won’t be decided only by what we listen to. It will be decided by what counts as the product—and who gets to do the counting.
From the songwriter’s chair, the same perk can look like a lever.
The MLC lawsuit made the conflict legible: a service can change what it pays not only by renegotiating rates, but by redefining the subscription itself. Judge Analisa Torres’s January 2025 dismissal gave Spotify room to keep using the bundle approach—for now—while publishers and advocates weigh what comes next.
NMPA’s warning—$230 million in the first year, over $3.1 billion through 2032—may ultimately prove too high, too low, or simply unprovable without deeper data. Yet the argument underneath is already shaping the industry: when platforms expand into adjacent media, they aren’t just adding content. They’re adding bargaining power.
Streaming’s next era won’t be decided only by what we listen to. It will be decided by what counts as the product—and who gets to do the counting.
1) What is Spotify’s “Audiobooks in Premium” benefit?
Spotify launched “Audiobooks in Premium” in the U.S. on November 8, 2023. It offers eligible subscribers 15 hours per month of audiobook listening from a catalog Spotify described as 200,000+ titles (later 250,000+). The benefit applies to Premium Individual subscribers and Family/Duo plan managers.
2) What changed on March 1, 2024—and why does it matter?
On March 1, 2024, Spotify began reporting Premium to the Mechanical Licensing Collective (MLC) as a “Bundled Subscription Offering.” Under U.S. rules, bundled subscriptions can use an allocation formula that may reduce the portion of subscription revenue attributed to music—potentially lowering mechanical royalties paid to songwriters and publishers.
3) What royalties are being disputed here?
The dispute concerns U.S. mechanical royalties for musical compositions (songwriters/publishers), administered in many cases through the MLC under the Section 115 blanket license framework. The disagreement is not primarily about master recording royalties paid to labels and recording artists.
4) What did the MLC accuse Spotify of doing?
The MLC alleged Spotify’s bundle reclassification led to underpayment of mechanical royalties and argued Spotify changed reporting without meaningful changes to Premium’s core service. The complaint highlighted that Spotify reported Premium as bundled beginning in March 2024 while Premium’s content and functionality allegedly “remains the same.”
5) What did Spotify argue in response?
Spotify argued audiobooks are a distinct product with more than token value, so Premium qualifies as a bundle under the regulations. Spotify’s position is that bundling treatment is permitted when a subscription includes another meaningful product alongside interactive music streaming.
6) What happened in court?
On January 29, 2025, Judge Analisa Torres (S.D.N.Y.) dismissed the MLC’s lawsuit at the motion-to-dismiss stage. Coverage also reported the MLC considered an appeal. The dismissal allowed Spotify, at least for now, to continue using the bundled reporting approach.
7) Where does the “$3.1 billion” figure come from?
The NMPA projected Spotify’s bundling approach could cost music publishers over $3.1 billion through 2032, a claim attributed to Danielle Aguirre, NMPA EVP & General Counsel, at the NMPA 2025 Annual Meeting (reported June 11, 2025). NMPA also cited an alleged $230 million first-year impact. These figures are advocacy estimates that depend on assumptions about growth, pricing, and how bundling persists.
T
About the Author
TheMurrow Editorial is a writer for TheMurrow covering entertainment.
Frequently Asked Questions
What is Spotify’s “Audiobooks in Premium” benefit?
Spotify launched “Audiobooks in Premium” in the U.S. on November 8, 2023. It offers eligible subscribers 15 hours per month of audiobook listening from a catalog Spotify described as 200,000+ titles (later 250,000+). The benefit applies to Premium Individual subscribers and Family/Duo plan managers.
What changed on March 1, 2024—and why does it matter?
On March 1, 2024, Spotify began reporting Premium to the Mechanical Licensing Collective (MLC) as a “Bundled Subscription Offering.” Under U.S. rules, bundled subscriptions can use an allocation formula that may reduce the portion of subscription revenue attributed to music—potentially lowering mechanical royalties paid to songwriters and publishers.
What royalties are being disputed here?
The dispute concerns U.S. mechanical royalties for musical compositions (songwriters/publishers), administered in many cases through the MLC under the Section 115 blanket license framework. The disagreement is not primarily about master recording royalties paid to labels and recording artists.
What did the MLC accuse Spotify of doing?
The MLC alleged Spotify’s bundle reclassification led to underpayment of mechanical royalties and argued Spotify changed reporting without meaningful changes to Premium’s core service. The complaint highlighted that Spotify reported Premium as bundled beginning in March 2024 while Premium’s content and functionality allegedly “remains the same.”
What did Spotify argue in response?
Spotify argued audiobooks are a distinct product with more than token value, so Premium qualifies as a bundle under the regulations. Spotify’s position is that bundling treatment is permitted when a subscription includes another meaningful product alongside interactive music streaming.
Where does the “$3.1 billion” figure come from?
The NMPA projected Spotify’s bundling approach could cost music publishers over $3.1 billion through 2032, attributed to Danielle Aguirre (NMPA EVP & General Counsel) at the NMPA 2025 Annual Meeting (reported June 11, 2025). NMPA also cited an alleged $230 million first-year impact. These figures are advocacy estimates that depend on assumptions about growth, pricing, and how bundling persists.
