Spotify has secured a significant legal victory against the Mechanical Licensing Collective (MLC) in a copyright lawsuit concerning its bundling strategy. Federal Judge Analisa Torres dismissed the case with prejudice, validating Spotify's approach to classifying its U.S. subscriptions as music and audiobook bundles.

Key Points of the Ruling:

• The court found Section 115 and its regulations unambiguous
• Audiobook streaming qualifies as a distinct product with more than "token value"
• Spotify's Premium service is properly categorized as a Bundle
• The timing of Spotify's bundling implementation was deemed legally irrelevant

Impact of Bundling Strategy:

• Over 99% of Spotify's U.S. subscriptions are now bundles
• The company has saved approximately $100 million in royalty payments
• The strategy has faced opposition from NMPA and songwriters

Judge Torres's Key Findings:

• Bundle regulations are defined differently from ordinary consumer understanding
• The number of subscribers accessing audiobooks is not relevant
• Previous higher royalty payments don't invalidate later bundle reclassification

Industry Implications:

• Other platforms like Apple Music and Amazon Music may adopt similar strategies
• Spotify has already secured a direct deal with Universal Music Publishing Group
• The ruling may influence future streaming service negotiations

Spotify's Response: "Bundle offerings play a critical role in expanding the interest in paying for music and growing the pie for the music industry. We know the regulations can be complex, but there's plenty of room for collaboration—and our recent deal with UMPG shows how direct licenses can create flexibility and additional benefits."

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