Spotify was sued by the MLC over bundling and cutting songwriter royalties after it reclassified its premium, duo and family plans as 'bundles.'
, calling the way the streamer reclassified its premium, duo and family plans as “bundles” and started paying a discounted royalty rate to publishers and songwriters “improper.”that publishers and songwriters will earn about $150 million less in U.S. mechanicals in the next year compared to what they would have been owed had the services not been bundled.
In the lawsuit filed by the MLC, which processes and distributes mechanical royalties to publishers and songwriters in the United States, the organization argues “premium is exactly the same service” as it was previously.
Spotify provided a statement to Billboard in response to the lawsuit, saying “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.
In its lawsuit filed Thursday, the MLC claims that to qualify for the bundle subscription rate, “an offering must include at least two distinct products or services. 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.
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