Spotify's audiobook bundling feature has drawn criticism from the National Music Publishers Association (NMPA) due to its impact on mechanical royalty rates for songwriters.

According to a 2022 settlement between NMPA and digital service providers (DSPs), bundled content qualifies for lower mechanical licensing rates. Since March 1, when Spotify introduced its Audiobook Access Tier, the company has been paying reduced rates for its bundled offerings.

NMPA President & CEO David Israelite strongly opposes this move, stating, "Spotify's attempt to radically reduce songwriter payments by reclassifying their music service as an audiobook bundle is a cynical, and potentially unlawful, move." He indicated that NMPA is exploring all available options to address this issue.

In response, Spotify defended its position, explaining that multiple DSPs have historically paid lower rates for bundles compared to standalone music subscriptions. The company emphasized that it has distributed $4 billion to publishing rights holders over the past two years and $9 billion in 2023 to various music industry stakeholders.

Looking ahead, Spotify plans to:

• Increase Premium subscription prices
• Launch a 'Basic' streaming plan without audiobooks that will pay the full licensing rate
• Continue expanding its product portfolio with different payment structures based on agreed-upon terms

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