Spotify Defends Audiobook Bundles as NMPA Protests Lower Publishing Royalties
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The National Music Publishers Association (NMPA) is challenging Spotify's audiobook bundling practice, which reduces mechanical royalty payments to songwriters. This dispute stems from a 2022 settlement between NMPA and digital service providers that included provisions for bundled content.
NMPA President & CEO David Israelite strongly criticized Spotify's move, calling it a "cynical and potentially unlawful" attempt to reduce songwriter payments through audiobook bundle reclassification. The 2022 settlement had established a 15.35% mechanical royalty rate for 2023-2027.
Spotify defended its position, stating that multiple DSPs have historically paid lower rates for bundles compared to standalone music subscriptions. The company emphasized its significant financial contributions, including $4 billion to publishing rights holders over the past two years and $9 billion in 2023 to various music industry stakeholders.
In response to the controversy, Spotify plans to introduce a 'Basic' streaming plan without audiobook access, which will maintain the full agreed-upon licensing rate rather than the reduced bundling rate.
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