Photo Credit: Jukka Aalho
Spotify’s new hotness is bundling—which it touts as offering consumers more choice. But the bundling of audiobooks with its music plans mean a lower mechanical royalty rate for songwriters. The NMPA has spoken out, now the Association of Independent Music Publishers (AIMP) joins in.
“As our industry partners are aware, changes in our product portfolio mean that we are paying out in different ways based on terms agreed to by both streaming services and publishers,” Spotify said in a statement after NMPA President David Israelite criticized the bundles. “Multiple DSPs have long paid a lower rate for bundles versus a stand-alone music subscription and our approach is consistent.”
Now AIMP has issued a statement from National Chair Michael Lau (New York), Marc Caruso (Los Angeles), Ree Guyer (Nashville), and Tony Alexander(Atlanta)—all chapter presidents.
“We are disappointed to learn that Spotify believes it should pay songwriters a lower royalty rate for music streams by unilaterally bundling a service for existing Premium subscribers who were not given an opportunity to ‘opt out’ of the offering,” the statement begins.
“Spotify provided no advanced notification to music creators, rights holders, or music fans, and provided no clear explanation for its decision. Subscribers to the Premium service expect Spotify to pay songwriters their fair share of any royalties. Spotify’s decision shows a remarkable lack of appreciation for music rights holders and the value of music. Bundling devalues all media offered—not only music.”
“Adding one dollar to the price of the new premier bundle tier will not have the effect of increasing the overall royalty pool for songwriters. Rather, by forcing the Premium tier to bundle audiobooks, Spotify either inadvertently or intentionally ends up devaluing music by creating a song royalty rate that decreases by more than 40%.”
“This directly contradicts the spirit of CRB Phono IV rates that were painstakingly negotiated only a few years ago. We, the indie music publishers and songwriters, thought we had a promising future with Spotify as a partner. We support and stand with our sister organizations to speak out against the unfair reclassification of the new Premium tier bundle.”
“At the least, we hope that Spotify will properly alert its subscribers of the change and inform subscribers that they may switch from their current Premium subscription to the new Basic tier. At the Basic tier, songwriters will be paid the settled streaming mechanical rate that they had been established during the CRB Phono IV proceeding, and by many standards, was already far too low.”
