Apple Music could potentially follow Spotify's strategy of reclassifying all subscriptions as bundles, primarily due to its existing Apple Music Classical offering. This move would allow Apple to significantly reduce mechanical royalty payments under the Phonorecords IV determination.

While Spotify achieved this through audiobook integration, Apple's path could be simpler through Apple Music Classical, which launched in March 2023. Currently offered free to Apple Music subscribers, creating a separate, lower-priced Classical plan could enable Apple to reclassify its main service as a bundle.

Key insights:

• Most YouTube Music paid users already access the service via bundle-classified plans
• Apple currently offers music through Apple One bundles
• In February, about 92% of Apple Music Individual subscriptions were non-bundles
• Legal barriers appear minimal for such a transition

Despite these possibilities, Apple hasn't indicated plans to pursue this strategy. The company likely values its current positioning and strong rightsholder relationships over potential royalty savings.

This topic will likely be central to upcoming Phonorecords V negotiations, though Apple could theoretically make this change immediately. Their justification for bundling could potentially be stronger than Spotify's audiobook-based approach.

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