A federal judge has granted Spotify's request to extend their response deadline to July 19th in the ongoing lawsuit filed by the Mechanical Licensing Collective (MLC) over alleged royalty underpayments related to bundling practices.

Spotify's legal team indicated the extension would allow time for both parties to communicate and potentially narrow the scope of issues. During this 50-day response period, the disputed mechanical royalties calculations, which reportedly began in March, will continue without intervention. Industry estimates suggest the royalty reduction could reach $150 million annually, or approximately $12.5 million monthly.

Spotify maintains its position, defending its bundling approach and citing support from the National Music Publishers' Association (NMPA) for the Phonorecords IV determination. This ruling, effective through 2027, specifically addresses the treatment of bundled products including music streaming services.

The dispute has drawn attention from major industry players, with Sony Music Publishing stating they are "considering all options" against Spotify. However, given Sony Music Entertainment's significant streaming revenue, a broader industry confrontation seems unlikely.

The case remains significant for the music industry, particularly regarding how streaming platforms implement bundling strategies and calculate royalty payments. The outcome could set important precedents for future streaming service business models and royalty calculations.

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