Spotify's latest royalty statements reveal a dramatic shift towards bundled subscriptions, significantly impacting publisher payouts. According to confidential documents from March 2024, approximately 97% of all Spotify subscription accounts in the United States are now categorized as bundles, resulting in lower mechanical royalty rates.

Key Findings:

• Nearly 20 million Individual subscriber accounts transitioned to bundled plans
• Only 869,912 Individual accounts remain non-bundled
• 4.17 million Duo accounts are now audiobook-bundled (up from 3.86 million)
• 5.65 million Family accounts are audiobook-bundled (up from 5.27 million)
• Almost zero non-bundled Duo or Family plans remain

Financial Impact:

• Expected annual royalty decline now exceeds $160 million
• Spotify's recent price increases could generate $500+ million annually
• Publishers will see minimal gains from these price increases due to bundling

Industry Response:

The NMPA and music publishers are fighting back through:

• A lawsuit filed by the Mechanical Licensing Collective (MLC)
• FTC complaints and state attorney general investigations
• Push for federal legislation allowing direct publisher negotiations
• MLC audit of Spotify's royalty payments

Spotify maintains its bundling approach is industry standard and plans to defend against legal challenges. The company is expected to release a music-only option in the United States, allowing subscribers to opt out of audiobooks for a reduced monthly fee.

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