When this story ends and the dust settles, Spotify may ask itself, “Is it worth the trouble when we bundle music and audiobooks together to lower mechanical royalty rates for American songwriters?”
In April, Spotify announced a controversial decision to reclassify its business. High quality Level is ‘bundle” By combining music and audiobooks.
The move resulted in Spotify paying lower mechanical royalty rates to publishers and songwriters in the United States.
However, the world’s largest subscription music streaming service may not have foreseen how fiercely Opposition to its bundling decision will come from songwriters and publishers.
In the words of David Israelite, chairman of the National Music Publishers Association, at the NMPA annual meeting in New York today (June 12): “Spotify has declared war on songwriters. Our response will be comprehensive.”
The “across the board” response from the music publishing industry so far includes:
- The National Music Publishers Association has issued a legal threat to Spotify, accusing the service of hosting unlicensed lyrics on its platform;
- The US-based Mechanical Licensing Collective (The MLC) launched a lawsuit against Spotify, suing SPOT for allegedly underpaying songwriters and publishers royalties;
- The NMPA is calling on Congress to update U.S. copyright law to allow publishers to negotiate in the “free market” like record companies.
Now, a new headache has emerged for Spotify.
At the NMPA annual meeting, David Israelite revealed that the organization had lodged a formal complaint with Spotify. Federal Trade Commission The State Food and Drug Administration said that “Spotify is suspected of illegal behavior” and “is harming millions of consumers and the music market.”
Yes: NMPA has filed this new complaint on behalf of the FTC consumer In the United States, rather than representing publisher members of trade organizations.
In the letter obtained by MBW (you can read the full text here), the NMPA claims that “Spotify switched millions of subscribers from music-only subscriptions to a ‘bundle’ of audiobooks and music without consumers’ consent.” subscriptions, thereby defrauding consumers by publicly announcing price increases on these subscriptions, failing to provide subscribers with the option to revert to music-only subscriptions, and blocking attempts to cancel subscriptions through dark mode and confusing website interfaces.”
Elsewhere in the letter, the NMPA argued that “Spotify’s conduct has had a profound negative impact” on music publishers and songwriters, claiming that “Spotify reduced royalties by claiming that its subscribers were now paying for other content. harmed their interests”. Than music”.
The letter adds: “Spotify also disadvantages competitors in the marketplace who seek to level the playing field. If Spotify’s conduct is allowed to continue, consumers will lose millions of dollars, undermine the music copyright system, and harm competition. We ask the FTC Investigate and stop inappropriate behavior at Spotify.
“Spotify has declared war on songwriters. Our response will be comprehensive.
David Israel, National Medical Products Administration
Israelite also revealed that the State Food and Drug Administration has handed over the matter to state prosecutors in Tennessee, New York, California, Colorado, Georgia, Connecticut, Illinois, Washington, D.C., North Carolina and Oregon. long. Israelite said that these specific U.S. states “have a strong interest in protecting songwriters and states that have strong consumer protection state laws.”
“We invite these state attorneys general to investigate this matter on behalf of Spotify customers in their respective states to investigate whether this matter violates state laws designed to protect consumers from this type of bait and switch,” Israelite said at today’s NMPA event. .
Additionally, today, Israelis said that the National Food and Drug Administration has referred the matter to “several leading consumer advocacy organizations who we expect will oppose consumers being mistreated in this way, including the National Consumers Union, Consumer Federation of America, Public Citizen, Consumer Advocacy Organization.” Action and truth in advertising organizations”.
Speaking to an audience at the NMPA annual conference, Israelite said: “For anyone who thinks this is too much, you are welcome to use our bundled version. We will unapologetically defend the rights of songwriters and music publishers and this kind of The author’s attack will ultimately fail.
He added: “Spotify knows what they are doing is risky and problematic. But what they hope is that the 44 million customers who never asked for or wanted an audiobook bundle don’t experience a fake bundle from a higher-priced Pack transitioned into trouble rejoining the program they were originally signed to – The Music Project.
“Spotify does have an exit ramp: reverse direction. Based on the past, I don’t expect that to happen. But it’s not too late for them to do the right thing.
In October, Spotify began offering 15 hours of audiobooks for free through its Premium plan, in other words, “bundling” access to audiobooks with its Premium service.
In addition to its decision to classify its premium music service as a bundle due to the addition of an audiobook element, Spotify has also been making moves to offer different types of subscriptions for the different types of content it offers.
The company launched a $9.99-per-month standalone audiobook package in the United States in March.
During the first quarter earnings call on April 23, Spotify co-founder and CEO Daniel Ek confirmed that the platform will soon launch a new “pure music” subscription package.
The new pure music level “Basic individual” quietly landed in the UK this month. The monthly fee is £10.99 and there is no access to audiobooks.
In the UK, Spotify’s Premium Personal plan includes 15 hours of audiobook listening per month for £11.99. Spotify increases the price of its flagship UK Premium subscription plan to £11.99 in april, From £10.99.
The UK price for the basic Personal Edition suggests it will also cost $10.99 in the US when it eventually launches.
Spotify also recently increased the price of its individual Premium tier in the U.S. by $1 per month to $11.99.global music business
