According to a new DMN Pro report, at least from a legal perspective, there’s little holding Apple Music back from joining Spotify in going ‘full bundle.’ Photo Credit: Mariia Shalabaieva
Will Apple Music “pull a Spotify” by reclassifying all its subscriptions as bundles? Thanks to Apple Music Classical, the royalty-reducing move would be easy to make.
DMN Pro’s latest weekly report explores that little-discussed possibility and other significant components of bundling in the contemporary streaming landscape. By now, many know about Spotify’s unilateral shift to bundled offerings, which, under the terms of the Phonorecords IV determination, are subject to different mechanical royalty calculations than those of standalone plans.
In sum, that means Spotify, to the frustration of the NMPA and more, is poised to pay a whole lot less to (music) publishers. Despite the platform’s decidedly aggressive embrace of bundling, it isn’t alone in capitalizing on the advantages, royalty-specific and otherwise, of multi-product packages.
A clear-cut majority of YouTube Music’s paid users access the service via plans classified as bundles for royalty-calculation purposes, DMN found when analyzing fully vetted publisher statements. (This and additional U.S. bundling-share details are compiled in a one-stop database available exclusively to Pro subscribers.)
And Apple, still pushing Apple One, is likewise tapping into bundles that include its music service. But what if Apple Music followed in Spotify’s footsteps by taking the bundling commitment to the next level?
Though the topic’s guaranteed to assume center stage during Phonorecords V negotiations, at least from a legal perspective, there’s seemingly nothing preventing Apple from making the jump at once. More pressing yet, the company could probably present a better case than Spotify did when justifying its “bundles.”
To be sure, Spotify only laid the groundwork for the bundling bonanza by adding 15 hours of monthly audiobook access to its main plans and subsequently debuting an “audiobook-only” tier with the identical components sans the ever-important music. As the Mechanical Licensing Collective pointed out in its lawsuit – and as was still the case when we initially covered the complaint – Spotify’s audiobook plan somewhat astonishingly provided full access to music for a time.
On the other hand, Apple Music Classical launched back in late March of 2023. Unlike Spotify’s audiobook plan, Classical is a standalone app offered to Apple Music subscribers at no extra charge. However, if a separate Classical plan with a lower price did come to fruition (and to put it bluntly, the maneuver wouldn’t require too much effort), Apple Music could potentially get in on the bundling action as well.
To date, there’s been no concrete indication that a bundling pivot is in the cards for Apple Music. The negotiating perks of its current positioning, besides the upside of avoiding ample criticism and maintaining strong rightsholder relationships for various collaborations, are presumably worth more than the sizable tranche of possible savings.
Even so, it should be kept front of mind that the option is readily available for Apple Music, which classified almost 92 percent of its Individual subscriptions as non-bundles in February of this year, per DMN Pro calculations.
