NMPA Clashes with Spotify Over Reduced Royalties in Audiobook Bundles
Spotify's bundling of audiobooks with its Premium subscription has sparked controversy with the National Music Publishers Association (NMPA) due to reduced mechanical royalty rates for songwriters.
Spotify app displayed on smartphone screen
The dispute centers on a 2022 settlement carve-out that allows Digital Service Providers (DSPs) to pay lower mechanical licensing rates for bundled content. This provision became relevant when Spotify introduced audiobooks for Premium users and launched its Audiobook Access Tier on March 1.
NMPA President & CEO David Israelite strongly criticized the move, calling it a "cynical, and potentially unlawful" attempt to reduce songwriter payments. The 2022 settlement had established a 15.35% mechanical royalty rate for 2023-2027.
Spotify defended its position, stating that multiple DSPs have historically paid lower rates for bundles compared to standalone music subscriptions. The company highlighted its significant contribution to the music industry, including $4 billion in global payments to publishing rights holders over the past two years and $9 billion distributed in 2023 across various music industry stakeholders.
In response to the controversy, Spotify plans to introduce a 'Basic' streaming plan without audiobook access, which will maintain the full agreed-upon licensing rate rather than the reduced bundling rate.