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

This reclassification could save Spotify millions in mechanical royalties through 2027, prompting strong opposition from both the MLC and the National Music Publishers' Association (NMPA).

The core dispute focuses on whether Spotify's main subscription packages qualify as bundles under Section 115 of the Copyright Act and the Phonorecords IV determination for royalty calculations from 2023-2027.

Key points from MLC's response:

• The organization argues that Spotify's Premium subscription does not constitute a true "Bundle" under Section 115
• MLC contends that the 15 hours of monthly audiobook access has minimal value to subscribers
• They assert that most subscribers join Spotify primarily for music access, not audiobooks
• The response highlights that 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 also claim Spotify's letter selectively presents facts while omitting others.

The MLC maintains that even if discovery reveals some subscribers value audiobooks, it wouldn't prove that audiobooks have more than token value to either Spotify or the majority of its subscribers. With hundreds of millions of dollars at stake, this legal battle appears far from resolution.

The organization concludes that Spotify's unsupported factual assertions raise questions that cannot be resolved through dismissal at the pleading stage, suggesting a potentially lengthy legal process ahead.

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