The Mechanical Licensing Collective (MLC) is challenging Spotify's motion to dismiss their lawsuit over unpaid royalties related to the streaming platform's controversial bundling practices.

The dispute centers on Spotify's reclassification of its Individual subscriptions as "bundles" that include both music and audiobooks. This reclassification, implemented in March 2024, reportedly saves Spotify approximately $150 million annually in mechanical royalty payments to creators.

Key points of contention:

• The MLC argues that audiobooks have only "token" value in these bundles and therefore don't qualify under Section 115 for bundle classification
• Spotify maintains that audiobooks represent a distinct product tier with substantial value
• The streaming platform points to its November 2023 audiobook integration and separate audiobook-only tier as evidence of legitimate bundling
• The MLC contends the audiobook-only tier is difficult to find and not truly distinct from the music package

In its 30-page opposition to dismissal, the MLC emphasizes that their claims are valid and deserve full consideration by the court. They argue that dismissal would be premature at this stage, as the complaint meets the plausibility standard required under Second Circuit law.

This dispute highlights growing tensions between music creators, publishers, and streaming platforms over fair compensation in the digital age. The outcome of this case could have significant implications for how streaming services structure their subscription offerings and calculate royalty payments.

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