NSAI, NMPA, More Share Frustration With Spotify’s Payment Change

/by

Since it was revealed that Spotify would be changing the way it pays songwriters and publishers by acting as a bundled subscription service with the addition of audiobooks, songwriter organizations and community members have expressed their frustration with the streaming giant.

Billboard recently estimated that Spotify’s reclassification from a “standalone portable subscription” to a “bundled subscription offering” will cause a $150 million cut to U.S. mechanical royalty payments, leading organizations such as Nashville Songwriters Association International (NSAI), National Music Publishers Association (NMPA) and Association of Independent Music Publishers (AIMP) to speak out.

“‘Bundling’ music with other offerings without a music-only option does not comport with our view of the intent of the Copyright Royalty Board (CRB) in recent Phonorecord procedures in which the NSAI participated. Further, this move negates gains awarded to songwriters by the CRB,” NSAI shared in an open letter. “NSAI will not accept what we view as an attempt to manipulate the intent of the court though a ‘bundling’ gimmick. NSAI calls for Spotify to immediately reverse its course and offer separate music subscription choices at price points that will fairly remunerate songwriters.”

NMPA President & CEO David Israelite shares, “It appears Spotify has returned to attacking the very songwriters who make its business possible. Spotify’s attempt to radically reduce songwriter payments by reclassifying their music service as an audiobook bundle is a cynical, and potentially unlawful, move that ends our period of relative peace. We will not stand for their perversion of the settlement we agreed upon in 2022 and are looking at all options.”

The AIMP—including Michael Lau (National Chair and New York Chapter President), Marc Caruso (Los Angeles Chapter President), Ree Guyer (Nashville Chapter President) and Tony D. Alexander (Atlanta Chapter President)—also shared a statement.

They write, “It is a deeply cynical move for Spotify to attempt to circumvent the CRB settlement agreed to by the NMPA & NSAI and DiMA in 2022 via this bundling ‘loophole,’ and further insulting that the price of a Spotify subscription will actually increase for users while cutting revenue for the songwriters who keep their business alive. This is especially problematic for independent music publishers, as they and all publishers are legally prevented from negotiating protections against bad-faith tactics such as this, while labels are allowed to do so in a free market.

“At this point, we still do not know how Spotify plans to notify its subscribers of this change. The right thing to do is to default existing subscribers to music-only accounts, and then give them the option to add-on the audiobook service for an additional $9.99 per month—Spotify’s proposed standalone rate for audiobooks. This ensures a proper, non-devalued royalty rate for both music and audiobook publishers and rightsholders, who will otherwise both be negatively affected by bundling.”

In response to the conversation, a Spotify spokesperson shares, “Spotify is on track to pay publishers and societies more in 2024 than in 2023. 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. Multiple DSPs have long paid a lower rate for bundles versus a stand-alone music subscription, and our approach is consistent.”

This is a developing story.

LB Cantrell
Latest posts by LB Cantrell (see all)