Apple Music has the potential to follow Spotify's path by reclassifying all its subscriptions as bundles, primarily due to its existing Apple Music Classical service, according to a new DMN Pro report.

Currently, Apple Music classifies nearly 92% of Individual subscriptions as non-bundles. However, the existing Apple Music Classical app, launched in March 2023, could serve as a foundation for bundle reclassification. By potentially creating a separate Classical plan at a lower price point, Apple Music could justify bundle classification for its main service.

This differs from Spotify's approach, which utilized audiobook access to justify bundle classification. While Spotify faced criticism for its implementation, Apple's existing Classical service provides a more legitimate basis for bundle classification under the Phonorecords IV determination.

Key considerations:

• Apple Music currently maintains strong rightsholder relationships
• No concrete plans for bundling have been announced
• The company already offers bundles through Apple One
• Legal framework exists to support such a transition
• Current negotiating position may be more valuable than potential royalty savings

The topic is expected to be a central focus during upcoming Phonorecords V negotiations. While Apple hasn't indicated plans to pursue this strategy, the option remains readily available, potentially allowing them to reduce mechanical royalty payments similar to Spotify's approach.

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