Sony Music Publishing is threatening action against Spotify over recent royalty reductions related to the platform's bundled subscription packages. The conflict emerged after Spotify began paying reduced mechanical royalty rates following the addition of audiobooks to its premium subscription tier.

Sony Music Publishing CEO Jon Platt has outlined key concerns in a letter to member songwriters and composers:

• Spotify reclassified all U.S. subscribers as bundle subscribers, regardless of whether they chose the bundle option
• This change resulted in approximately 20% reduction in mechanical royalty payments
• The reduction currently only impacts U.S. royalties
• Sony disagrees with Spotify's interpretation of the CRB rate structure

Recent developments in this dispute include:

• The Mechanical Licensing Collective (MLC) filed a lawsuit against Spotify in Federal Court in New York City
• The National Music Publishers' Association (NMPA) sent Spotify a notice regarding unlicensed videos, lyrics, and podcasts
• Spotify maintains that its actions comply with the 'Phonorecords IV' agreement

While publishers consider their options, the ability to remove content may be limited due to statutory and compulsory licensing rules. However, music use in podcasts and videos falls outside these regulations and requires direct authorization.

Sony Music Publishing is working with the NMPA to explore all available options to enforce the rates achieved in CRB Phono IV and ensure proper compensation for songwriters across Spotify's platform.

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