With the introduction of the stand-alone audiobooks offering, Spotify is now able to pay lower music-licensing rates for the music-and-audiobook bundle, introduced in the U.S. in November 2023. The 2022 settlement agreement between the National Music Publishers Assn. and streaming services includes a carveout for bundles (such as Amazon Prime and Apple Music + Apple News), which the new audiobook offering falls under. Such plans lower the mechanical licensing rates the company pays in the U.S. Spotify’s lower royalty rates are retroactive to March 1, 2024.
However, NMPA president-CEO David Israelite had strong words for the move when contacted for comment by Variety. “It appears Spotify has returned to attacking the very songwriters who make its business possible,” he wrote. “Spotify’s attempt to radically reduce songwriter payments by reclassifying their music service as an audiobook bundle is a cynical, and potentially unlawful, move that ends our period of relative peace. We will not stand for their perversion of the settlement we agreed upon in 2022 and are looking at all options.” The NMPA and streaming services resolved a years-long standoff over royalty rates with a Copyright Royalty Board ruling in 2022, and agreed upon a new rate of 15.35% for the 2023-2027 period.