Spotify is revamping its subscription plans in the U.S., launching a new “Basic” plan that doesn’t offer audiobooks. The streaming giant has previously been criticized for bundling music and audiobooks together, negatively impacting pay for U.S. songwriters.
Until then, Spotify “High quality” Plan offers ad-free music listening, unlimited skipping, and 15 hours of audiobook access per month for a single price of $11.99which recently proposed $10.99. Last October, Spotify added 15 hours of audiobooks to Premium subscribers, giving paying subscribers access to a catalog of about 150,000 books.
Users can now select new “basic” planned for $10.99Spotify said on Friday (June 21) that it is offering all the benefits of music streaming but without audiobooks. Existing Premium subscribers will retain their audiobook access, but new subscribers can choose between the Basic plan and the Standard Premium plan, which remains $11.99.
Spotify also continues to offer $16.99/month “Superior Double”d$19.99/month The Senior Family plan offers the same premium benefits for two people and up to six people living together, respectively.
For those who prioritize audiobooks, Spotify offers a separate “Audiobook Access” Plan is $9.99 per month. This tier provides 15 hours of audiobook listening, but music listening will revert to the free, ad-supported tier. (In its lawsuit against Spotify, the Mechanical Licensing Collective (MLC) argued that this is not how the audiobook access program works, since it gives subscribers access to ad-free versions.)
Spotify’s launch of its basic plan without audiobooks appears to be a response to growing criticism of its bundling practices. In March, the company announced it would reclassify its premium subscriptions into “bundles,” combining music and audiobooks. According to what is called Disc IVMusic streaming services in the U.S. can pay publishers and songwriters lower royalties for bundling music compared to standalone music subscriptions.
Spotify’s move sparked outrage from trade bodies, music companies and even lawmakers who said it unfairly disadvantaged songwriters.
By spinning off audiobooks and offering a cheaper basic plan, Spotify aims to cater to a wider range of user preferences. Price-conscious listeners who don’t use audiobooks can now enjoy ad-free music at a slightly lower price, while audiobook lovers can choose to subscribe to a dedicated audiobook access plan.
This latest move also comes amid growing competition in the music streaming market. Amazon Music Unlimited Offer cheaper”personal” planned for $9.99 and lower single-device plans $5.99.
Spotify has a strong user base despite its slightly higher pricing. In the first quarter of 2024, streaming services added 3 million Premium subscribers, add An annual increase of 14%, arrive 236 million.
While Spotify’s new plans give users more options, the issue of songwriter compensation remains. The Phonorecords IV agreement still allows for reduced royalties on bundled music. Last week, three U.S. lawmakers expressed concerns about Spotify’s bundling practices. in a letter addressed to Sheila PerlmutterThe U.S. Copyright Registry questioned whether Spotify’s new approach complies with the spirit of the 2018 Music Modernization Act (MMA).
in addition, national music publishers association (NMPA), which represents major publishers, e.g. Sony Music Publishing, Universal Music Publishing Group, WarnerChappell Musicand independent publishing companies accused Spotify of “attacking songwriters.” President and CEO, State Food and Drug Administration david israel Describing Spotify’s actions as “a cynical and potentially illegal move that ends a period of relative peace for us”.
The NMPA has threatened Spotify with legal action over its new bundling policy and urged Congress to update U.S. copyright law to allow publishers to negotiate in a “free market” like record labels.
Meanwhile, US-based MLC is suing Spotify, accusing it of paying too few royalties to songwriters and publishers. They argue that Spotify’s application of the bundled rate formula to its premium subscriptions is inconsistent with the law.
Meanwhile, Sony Music Publishing said it was considering “all options” for Spotify in response to the change, saying in a letter that SMP songwriters and composers in the U.S. would see their mechanical royalty payments from Spotify reduced by approximately 20%.
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