The Mechanical Licensing Collective (MLC) and Spotify are intensifying their legal dispute over mechanical royalties, with both parties showing no signs of reaching a settlement.

The conflict centers on Spotify's decision to reclassify its U.S. subscriptions as bundles following the addition of audiobooks and a non-music plan. This reclassification could save Spotify millions in mechanical royalties through 2027.

Key Points of Contention:

• The MLC argues Spotify's Premium subscription is not a true "Bundle" under Section 115 of the Copyright Act
• Spotify maintains its packages qualify as bundles under current regulations
• The dispute focuses on whether the included 15 hours of monthly audiobook listening constitutes meaningful value

The MLC's Counter-Arguments:

1. The bundled offerings don't represent genuine multi-product packages
2. The audiobook component provides minimal value to subscribers
3. Most users subscribe primarily for music access, not audiobooks

In response to Spotify's dismissal request, the MLC emphasized that these factual disputes cannot be resolved through a motion to dismiss and require further discovery proceedings.

The outcome of this case could have significant implications for streaming royalty calculations and set precedents for future bundle classifications in the music industry. With hundreds of millions of dollars at stake, both parties appear prepared for a prolonged legal battle.

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