Apple Music could potentially follow Spotify's strategy of reclassifying all subscriptions as bundles, primarily due to its existing Apple Music Classical service. This move would allow Apple to significantly reduce mechanical royalty payments under the Phonorecords IV determination.

The current streaming landscape shows increasing adoption of bundled offerings:

• YouTube Music has a majority of paid users accessing through bundles
• Apple already offers bundles through Apple One
• Spotify recently shifted to bundled offerings by adding audiobook access

Apple's advantage lies in Apple Music Classical, which launched in March 2023 as a standalone app included with Apple Music subscriptions. By potentially creating a separate Classical plan at a lower price point, Apple could justify reclassifying its main service as a bundle.

Key considerations:

• Currently, almost 92% of Apple Music Individual subscriptions are non-bundles
• No concrete plans for a bundling pivot have been announced
• Apple may value maintaining strong rightsholder relationships over potential savings
• The topic will likely be central to Phonorecords V negotiations

While Spotify faced scrutiny for its audiobook-based bundling strategy, Apple's established Classical service could provide a more legitimate foundation for bundle classification. However, Apple appears to prioritize industry relationships and collaboration opportunities over potential royalty savings.

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