The Mechanical Licensing Collective (MLC) and Spotify are intensifying their legal dispute over mechanical royalties, with both parties standing firm in their positions against an early settlement.

The core issue centers on Spotify's decision to reclassify its U.S. subscriptions as bundles following the addition of audiobooks and a non-music plan. This reclassification significantly reduces Spotify's mechanical royalty obligations through 2027.

Key Points of Contention:

• The MLC argues Spotify's Premium subscription doesn't qualify as a "Bundle" under Section 115 of the Copyright Act
• Spotify maintains its packages constitute legitimate bundles
• The dispute involves hundreds of millions of dollars in mechanical royalties

The MLC's Response to Spotify's Dismissal Request:

1. The 15 hours of monthly audiobook content has minimal value to subscribers
2. Most users subscribe primarily for music access
3. Spotify's argument selectively presents facts while omitting crucial details
4. The case requires factual discovery that can't be resolved through dismissal

The MLC emphasizes that even if some subscribers value audiobooks, it doesn't automatically qualify the service as a bundle under legal definitions. They argue that these factual determinations require a full trial rather than dismissal at the pleading stage.

The National Music Publishers' Association (NMPA) has joined in opposing Spotify's reclassification, highlighting the broader industry implications of this precedent-setting case.

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