Indie Music Publishers Step Up the Pressure Against Spotify: AIMP Says Bundling Shenanigans Will Cut Mechanical Royalties an Estimated $150 Million

AIMP statement on Spotify bundling cutting publisher royalties
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AIMP statement on Spotify bundling cutting publisher royalties
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Photo Credit: Adam Nir

Spotify’s recent bundling of audiobooks with its music offering is changing how it pays songwriters and publishers. With an estimated $150 million in lost revenue, the music publishing industry isn’t thrilled with the upcoming changes.

The addition of the audiobook feature to its existing Spotify Premium offering allows the platform to claim a new bundled disbursement rate — and that’s rankling music publishers large and small. The new Spotify Premium rate values audiobooks at $9.99 and the Premium bundle at $10.99. After doing the math, that means Spotify only values music at 52% of the total bundle value—just $5.70 per Spotify Premium subscriber.

The resulting reductions for publishers has already been raised by NMPA chief David Israelite, though now there are numbers being placed on the possible damage: Billboard’s Kristin Robinson estimates a loss of $150 million in mechanical royalties for songwriters and publishers due to this change.

Now, industry bodies like the Association of Independent Music Publishers (AIMP), alongside the aforementioned National Music Publishers Association (NMPA), are speaking out about the changes.

“It appears Spotify has returned to attacking the very songwriters who make its business possible, NMPA President & CEO David Israelite said after Spotify introduced its new bundled tiers. “Spotify’s attempt to radically reduce songwriter payments by reclassifying their music service as an audiobook bundle is a cynical—and potentially unlawful—move that ends our period of relative peace. We will not stand for their perversion of the settlement we agreed upon in 2022.”

An AIMP statement jointly signed by Michael Lau (National Chair & NY Chapter President), Marc Caruso (Los Angeles Chapter President), Ree Guyer (Nashville Chapter President), and Tony D. Alexander (Atlanta Chapter President) highlights the issue even further.

“It is a deeply cynical move for Spotify to attempt to circumvent the CRB settlement agreed to by the NMPA & NSAI and DiMA in 2022 via this bundling ‘loophole’ and further insulting that the price of a Spotify subscription will actually increase for users while cutting revenue for the songwriters who keep their business alive,” the statement addressing the $150 million figure begins.

“This is especially problematic for independent music publishers, as they and all publishers are legally prevented from negotiating protections against bad-faith tactics such as this, while labels are allowed to do so in a free market.”

“At this point, we still do not know how Spotify plans to notify its subscribers of this change. The right thing to do is to default existing subscribers to music-only accounts, and then give them the option to add-on the audiobook service for an additional $9.99 per month—Spotify’s proposed standalone rate for audiobooks.”

“This ensures a proper, non-devalued royalty rate for both music and audiobook publishers and rightsholders, who will otherwise both be negatively affected by the bundling. The AIMP offers its unequivocal support to the NMPA as they fight this critical battle to prevent Spotify’s scheme from taking effect.”

“We encourage all independent music publishers to join us in this stance and make their songwriters aware of this attack on their livelihood. We cannot allow bundling to become a precedent that can be used to deprive songwriters of their well-earned royalties.”

More as this develops.