Well, it looks like Spotify has done it again! Despite the fact that the streaming giant is already notorious for its measly royalty payouts for songwriters, the Swedish company helmed by Daniel Ek has found yet another way to pay artists even less.
As Billboard's Kristin Robinson reports, Spotify recently upped the costs of premium subscriptions from $9.99 to $10.99 per month — an increase that comes with an extra 15 hours of audiobook content. The company is now claiming that, by adding audiobooks into its premium tier, it qualifies to pay songwriters a discounted "bundle" rate due to footing the licensing bill for both music and books.
UPDATE (5/9, 1:07 p.m. ET): A Spotify spokesperson issued the following statement to Exclaim! via email:
Spotify is on track to pay publishers and societies more in 2024 than in 2023. As our industry partners are aware, changes in our product portfolio mean that we are paying out in different ways based on terms agreed to by both streaming services and publishers. Multiple DSPs have long paid a lower rate for bundles versus a stand-alone music subscription, and our approach is consistent.
Billboard estimates that this will result in songwriters and publishers earning $150 million USD less from premium, duo and family plans — which are also being reclassified as bundles — within the first 12 months of these changes being in effect. The loss in royalties will be even greater if Spotify increases its subscription rate again to $11.99, as the company is reportedly considering. (So far these changes are only being made to the US Spotify, but it seems unlikely for things to stay that way.)
"It appears Spotify has returned to attacking the very songwriters who make its business possible," David Israelite, the National Music Publishers' Association (NMPA) president and CEO, told Billboard when the change to premium subscriptions was initially announced. "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."
Earlier this year, the streaming giant implemented a re-structured royalty system that demonetized any tracks with less than 1,000 streams.
