Joseph Lavoie’s Post

NEW: The NMPA has filed a complaint with the FTC against Spotify for bundling in audiobooks to its premium subscription tiers. This is the first time the NMPA has involved the Federal Trade Commission in its battle with a tech company. The letter reads: “The [NMPA] writes to urge the FTC to address unlawful conduct by Spotify that is harming millions of consumers and the music marketplace… Spotify has deceived consumers by converting millions of its subscribers without their consent from music-only subscriptions into ‘bundled’ audiobook-and-music subscriptions, publicly announcing increased prices for those subscriptions, failing to offer an option for subscribers to revert to a music-only subscription, and thwarting attempts to cancel through dark patterns and confusing website interfaces. This bait-and-switch subscription scheme is “saddling shoppers with recurring payments for products and services they did not intend to purchase or did not want to continue to purchase.” https://lnkd.in/gRyskist

Spotify will pay songwriters and publishers an estimated $150 Million less in U.S. mechanical royalties in the next twelve months, according to my math. Multiple sources I spoke to also found similar numbers. 💬 Why? By adding audiobooks into Spotify’s premium tier, Spotify now claims it qualifies to pay a discounted “bundle” rate to songwriters for premium streams, given Spotify now has to pay licensing for both books and music from the same price tag. 💬 How did I find this? This estimate of lost value for the next year was found by comparing what 2024 payouts were projected to be for U.S. mechanical royalties if this change never happened weighed against projected payouts for U.S. mechanical royalties that are now projected under the bundling discounts. 💬 Can you opt out? Eventually, Spotify says it will roll out a music-only subscription. if you manually switch to that, your streams will count towards these royalties the old fashioned way. Unfortunately bundling kicked in in March, all premium users are automatically on it, and the music-only option isn't available yet. Learn more below:

Everyone should read Adam Parness's op ed in Billboard about the fight between Spotify and the music publishing community. Some highlights: 1. Spotify's interpretation of a "bundled sub" is quite aggressive and not in the spirit of the agreement (Phonograph IV) 2. It's telling that the music + audiobook tier is *only* available in the US, where Phonograph IV has jurisdiction. 3. Songwriters are estimated to be short approx $150M USD if Spotify's way stands #musicbusiness #musicpublishing #streaming #musicindustry #spotify

Spotify Faces NMPA Backlash Over Audiobook Inclusion in Premium Plans Spotify has come under fire from the National Music Publishers' Association (NMPA) for its recent decision to include audiobook content in all paid subscription plans. The NMPA accuses Spotify of using this tactic to boost profits, mislead consumers, and undermine the music royalty system. Last year, Spotify announced the addition of 15 hours of audiobooks to all Premium plans, alongside a separate audiobook-only subscription priced at $10 per month. The NMPA claims that these changes have resulted in higher subscription fees, leaving customers with no choice but to switch to the free, ad-supported tier. Notably, the NMPA's complaint to the Federal Trade Commission (FTC) estimates that Spotify could pay $150 million less in music royalties in the first year of these new bundled plans. Furthermore, the NMPA argues that the audiobook-only plan is a "sham," as it costs only $1 less than the full Premium Plan despite offering the same audiobook content. The impact of this controversy on Spotify's proposed changes to its royalty model remains uncertain. Both artists and publishers have consistently criticized the streaming giant and the broader streaming ecosystem for their inadequate compensation to music creators. # Thank you Luciana Santos for your submission!

BREAKING 📣 The MLC sued Spotify for "improperly" characterizing its premium subscriptions as bundles and paying a discounted royalty rate to songwriters and publishers, starting in March. "The financial consequences… are enormous for songwriters and music publishers," the complaint reads. (Billboard estimates that the loss will be about $150 million for the first year) The MLC says it was given no advance notice of the change. The MLC also claims that to qualify for the bundle subscription rate, “an offering must include at least two distinct products or services" and that it believes "Premium does not,” adding, “Premium already consisted of unlimited music and access to other audio products including up to 15 hours of audiobook listening” as well as other offerings like podcasts. Spotify added audiobooks into premium for free late last year. In March, it quietly launched an audiobook-only tier and began to pay out royalties for premium tiers differently, now calling them "bundles" which qualify for a discount. Spotify's response: “The lawsuit concerns terms that publishers and streaming services agreed to and celebrated years ago under the Phono IV agreement. Bundles were a critical component of that settlement, and multiple DSPs include bundles as part of their mix of subscription offerings. Spotify paid a record amount to publishers and societies in 2023 and is on track to pay out an even larger amount in 2024. We look forward to a swift resolution of this matter.” https://lnkd.in/gpXwxCUt

Interesting insight on music rights calculations. According to a recent study, which is nothing new, users always tend to look for ways to reduce the basis on which music rights are calculated. The lower the better. Check out this blog post for more information on Spotify's publisher dilemma and how the audiobook bundling trend is making music publishers mad. Is all-in-one audio sustainable? Read more here: https://lnkd.in/dKVkmbeD

“US music publishers are ready to “fight again” as they attempt to halt efforts by Spotify to reclassify its subscription package. The streaming service wants to say that its main subscription product is a ‘bundle’ of music, podcasts and audiobooks. This would allow it to pay less to songwriters. The campaign against Spotify’s sneaky audiobook bundling plans in the US is gaining momentum, with the boss of the National Music Publishers Association declaring “it’s time to fight again”, and the Association Of Independent Music Publishers committing its “unequivocal support” for the NMPA as it embarks on a “critical battle to prevent Spotify’s scheme from taking effect”…. Spotify has been reshuffling its range of subscription products in the US, so that there is one subscription option that offers music and podcasts, and another that offers audiobooks. Meanwhile, the existing premium subscription option - which includes music, podcasts and audiobooks - is being defined as a bundle of those two other products. That is important because of the compulsory licence that sets out the payments streaming services must pay to music publishers and songwriters in the US. That licence has provisions for bundles, meaning that if Spotify reclassifies its main premium subscription as a bundle it will reduce what it has to pay publishers and songwriters on its core product. It’s been estimated that this move could result in $150 million of lost revenue.” #Spotify #NMPA #AIMP #Streaming #Songwriters #StreamingRoyalties #Royalties #MusicTracks #MusicStreams #Music #MusicBusiness #Musica #MusicIndustry #Musique #Musik #MusicBiz #CompulsoryLicense #US #MusicPublishing #CRB #DiMA #StreamingServices #StreamingMedia #MLC #Pandora

The National Music Publishers Association (NMPA) and the Association Of Independent Music Publishers (AIMP) are actively opposing Spotify's plan to bundle audiobooks with its premium subscription, which could lower royalties for songwriters. AIMP has shifted its demand from user opt-out instructions to automatic opt-in, aiming to protect songwriter earnings. Spotify's move to classify its premium subscription as a bundle under US compulsory licensing could lead to an estimated $150 million in revenue loss, sparking legal considerations from NMPA and criticism from AIMP. The music community, supported by authors, is rallying against Spotify's bundling strategy, advocating for fair compensation and transparent subscription options. #spotify #musicpublishers #nmpa