Has Spotify’s Music Publisher Showdown Gone from Battle to All-Out War? NMPA Head Promises ‘All-Encompassing’ Response to Bundling Frenzy

TikTok NMPA license not renewing
  • Save

TikTok NMPA license not renewing
  • Save
Photo Credit: NMPA

The bundling-centered showdown between Spotify and music publishers has evolved from a battle into a war – at least according to National Music Publishers’ Association (NMPA) head David Israelite, who’s described the situation as a “war on songwriters.”

That bold declaration was made during the NMPA’s annual meeting yesterday, against the backdrop of an intensifying dispute between Spotify and publishers. For the uninitiated, Spotify’s abrupt reclassification of its existing plans as bundles – a move set in motion by the rollout of an audiobook-only offering – is fueling a material decrease in U.S. mechanical royalties.

In brief, said material decrease is the result of royalty-calculation differences for bundles and non-bundles under Phonorecords IV. The latter determines how much on-demand streaming platforms pay in mechanicals and is set to run through 2027’s end.

For obvious reasons, the development isn’t sitting right with key players on the compositional side. The Mechanical Licensing Collective (MLC) is challenging the bundling reclassifications (and seeking allegedly unpaid royalties) in court, and NMPA-corralled publishers have in a letter encouraged the FTC to investigate Spotify’s alleged “unlawful conduct” and alleged “unfair and deceptive practices.”

Running with the claims featured in the MLC’s complaint, that FTC letter, we reported yesterday, points to alleged consumer harm stemming from Spotify’s audiobook bundling – allegedly inflating costs, inhibiting choice, and “ultimately leading to lower quality and less availability of music.”

“Further, by charging consumers without consent, Spotify has engaged in unfair practices,” the NMPA spelled out. “Spotify’s ‘bundling’ harms consumers by duping them into paying more for a service that they do not want.”

While the fate of that argument and the MLC courtroom confrontation remains to be seen – Spotify is reportedly adding a music-only alternative in certain regions – the episode is displaying few signs of a near-term resolution.

As mentioned at the outset, the NMPA’s David Israelite underscored as much during his organization’s annual meeting yesterday.

“Spotify has declared war on songwriters. Our response shall be all-encompassing,” Israelite pledged, with on-screen text showing a quote from Winston Churchill’s 1940 “We Shall Fight on the Beaches” speech.

On the response front, Israelite highlighted the MLC suit, a push for federal legislation regarding direct publisher negotiations with DSPs, forthcoming Phonorecords V proceedings, the MLC’s Spotify audit, and the NMPA’s firmly worded Spotify licensing qualms (including alleged infringement concerning videos, lyrics, music in podcasts, and more).

Our letter was not just a warning shot,” Israelite communicated of those qualms, “and NMPA has never lost a lawsuit. So you will want to stay tuned.”

Shifting the focus to the opposite corner of the dispute, Spotify has pushed back against the claims publicly on multiple occasions.

“At Spotify,” the company relayed in an official statement, “our approach towards expanding our offerings and increasing pricing is industry standard. We always notify users well in advance of any price increases and offer easy cancellations as well as multiple plan options to consider.

“We categorically reject the NMPA’s baseless accusations and will continue to provide our users incredible value and a best-in-class experience,” Spotify concluded.

As described to DMN by a major-label source working with Spotify, the service isn’t posturing in the media by putting out these and similar comments. Rather, the platform believes it will prevail “on the very substantial merits” and won’t be deterred by the MLC suit or the NMPA’s FTC complaint.

Among other things, that clear-cut resolve, coupled with the NMPA’s stance, means we should buckle up for what will likely prove a bitter clash not only through the remainder of 2024, but into 2025 and possibly beyond.