Spotify has filed arguments to dismiss a lawsuit from the Mechanical Licensing Collective (MLC) regarding its audiobook bundling practices and related royalty payments.

The dispute centers on Spotify's reclassification of its subscriptions as "bundles" after including audiobook access, which significantly impacts mechanical royalty calculations under Phonorecords IV through 2027. This change affects nearly all U.S. Spotify subscriptions and has reportedly reduced publisher royalty payments by over $10 million monthly.

Key points from Spotify's dismissal arguments:

1. Audiobooks have "significant, demonstrable value" as part of Spotify Premium
2. Books and audiobooks are distinct from music, created by different rights holders
3. The timing between audiobook integration and royalty recalculation is legally irrelevant
4. Spotify isn't required to market its standalone audiobook product in any particular way

While Spotify has since made unbundled music-only subscriptions available, existing customers must manually switch plans, making a widespread return to unbundled subscriptions unlikely.

The case timeline includes:

• Document requests deadline: August 9th
• Deposition completion: November 19th
• Next case management conference: December 9th
• MLC's response to Spotify's arguments: Expected July 26th

This case could set important precedents for how streaming services structure their offerings and calculate royalty payments, with potential implications for other platforms like Apple Music.

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