The Mechanical Licensing Collective (MLC) has formally responded to Spotify's motion to dismiss in their ongoing legal dispute over mechanical royalties. This battle centers on Spotify's controversial decision to reclassify its U.S. subscriptions as bundles following the addition of audiobooks.

The core issue involves hundreds of millions of dollars in mechanical royalties, with Spotify claiming significant savings through 2027 due to this reclassification. The dispute focuses on whether Spotify's main subscription packages qualify as bundles under Section 115 of the Copyright Act and the Phonorecords IV determination.

Key points in MLC's response:

• The complaint contains detailed factual allegations explaining why Spotify's Premium subscription is not a "Bundle" under Section 115
• MLC argues that Spotify's packages aren't true multi-product offerings
• The 15 hours of monthly audiobook access has minimal value to subscribers
• Most subscribers join primarily for music access, not audiobooks
• These factual disputes cannot be resolved through a motion to dismiss

The MLC emphasizes that Spotify's dismissal arguments ignore crucial factual allegations that must be accepted as true for dismissal purposes. They argue that even if some subscribers value audiobooks, this doesn't prove they have more than "token value" to Spotify or most subscribers.

The MLC maintains that these factual questions cannot be resolved at the pleading stage, making dismissal inappropriate. With both parties firmly entrenched in their positions, a quick settlement appears unlikely.

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