Spotify will potentially pay songwriters about $150 million less in U.S. mechanical royalties next year after bundling its plans with audiobooks.
When Bloomberg reported that Spotify would be upping the cost of its premium subscription from $9.99 to $10.99, and including 15 hours of audiobooks per month in the U.S., the change sounded like a win for songwriters and publishers. Higher subscription prices typically equate to a bump in U.S. mechanical royalties — but not this time.
By adding audiobooks into Spotify’s premium tier, the streaming service now claims it qualifies to pay a discounted “bundle” rate to songwriters for premium streams, given Spotify now has to pay licensing for both books and music from the same price tag — which will only be a dollar higher than when music was the only premium offering. Additionally, Spotify will reclassify its duo and family subscription plans as bundles as well.
I've been a paying member for almost a decade. I've been training it that entire time with what I do and don't like. I've also been using their suggested playlists for years and further refining what they recommend. So their algorithm is a huge part of it for me. I am constantly finding songs and artists I wouldn't have been exposed to otherwise.
That said, I've been holding my nose while I renewed the service for the past couple of years. I'm willing to part ways for Tidal if it's a comparable service with better benefits to the artists.