Spotify has won a significant legal victory against the Mechanical Licensing Collective (MLC) in a lawsuit challenging its bundling strategy. Judge Analisa Torres dismissed the case with prejudice, validating Spotify's approach to classify its U.S. subscriptions as music and audiobook bundles.

Key Points of the Ruling:

• The court found Section 115 and its implementing regulations "unambiguous"
• Judge confirmed audiobook streaming is a distinct product with more than "token value"
• Premium service qualifies as a proper bundle under current regulations
• Timing of bundle implementation deemed irrelevant to legal status

Impact of Bundling Strategy:

• Over 99% of Spotify's U.S. subscriptions are now bundles
• Company has saved approximately $100 million in royalty payments
• Strategy has faced opposition from NMPA and songwriters
• Recent direct deal with Universal Music Publishing Group shows potential for collaboration

Legal Implications:

• Ruling may influence other streaming platforms' bundling strategies
• Similar approaches possible for services like Apple Music (with Classical) and Amazon Music (with Audible)
• Decision reinforces current regulatory interpretation of bundling

Spotify's response emphasizes that bundle offerings play a crucial role in expanding paid music consumption and growing industry revenue, while acknowledging the complexity of regulations and the potential for direct licensing agreements to create additional benefits.

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