Spotify's Latest Royalty Reports Show 97% of Subscriptions Now Classified as Lower-Paying Bundles
Spotify's March 2024 royalty statements reveal a dramatic shift towards bundled subscriptions, significantly impacting publisher payouts. Nearly 97% of all Spotify subscription accounts in the United States are now categorized as bundles, resulting in lower mechanical royalty rates.
Bundle of tied wood sticks
Key Changes in Subscription Categories:
- Individual Plans: Over 20 million accounts transitioned to bundles, with only 869,912 remaining non-bundled
- Family Plans: 5.65 million accounts (nearly 100% bundled)
- Duo Plans: 4.17 million accounts (nearly 100% bundled)
Financial Impact:
- Estimated annual royalty decline exceeds $160 million
- Spotify projects to gain over $500 million annually from recent price increases
- Publishers expected to receive minimal share of these gains
Industry Response:
- NMPA Chief David Israelite describes it as a "war on songwriters"
- MLC filed lawsuit challenging bundling reclassifications
- NMPA lodged complaints with FTC and state attorneys general
- Push for federal legislation to allow direct publisher negotiations
Spotify's Position:
- Defends bundling as industry standard
- Claims transparent communication about price increases
- Offers multiple plan options
- Prepared to contest legal challenges
Future Developments:
- Possible introduction of music-only option in the US
- Potential $1 discount for non-audiobook subscriptions
- Ongoing legal and regulatory challenges
NMPA music bundling image
Man wearing green shirt at screen
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