Early March, Spotify Recategorizing its premium individual, dual and family subscription streaming plans into bundles as these plans now offer access to audiobooks.
The controversial move resulted in Spotify paying lower mechanical royalty rates to publishers and songwriters in the United States, drawing the ire of the National Music Publishers Association and the Mechanical Licensing Collective (MLC).
The latter group sued Spotify in the United States in May, claiming that it underpaid songwriters and publishers royalties due to its Premium “bundling” initiative.
Today (November 19), we learned about Spotify’s competitors, amazon music, Has become the latest bundled music streaming service audiobook and its premium subscription.
In a bid to challenge Spotify’s audiobook service, Amazon Music Unlimited users in the US, UK and Canada can now listen to one audiobook per month through Amazon’s own audiobook service audible. The retail and tech giant acquires Audible for US$300 million 2008.
this State Drug Administration has responded to the news, with the group reacting to Amazon Music’s move The company’s reaction to Spotify’s move earlier this year was notable.
President and CEO, State Food and Drug Administration david israel The NMPA, which represents prominent independent music publishing companies as well as major publishers Sony Music Publishing, Universal Music Publishing Group and Warner Chappell Music, is “optimistic about Amazon’s new bundle,” the company told us in a statement today.
“Unlike Spotify, Amazon engages in the music publishing and songwriting industries in a respectful and productive manner.”
David Israel, National Medical Products Administration
David Israelite added: “Unlike Spotify, Amazon engages in the music publishing and songwriting industry in a respectful and productive manner.
“We do not expect this new Amazon bundle to reduce songwriter revenue. Unlike Spotify, Amazon treats music creators as business partners and seeks to reach agreements before the first round of royalty payments.
“This is in stark contrast to Spotify, which has sought to abuse compulsory licenses and slash payments to songwriters.”
Spotify announced this spring that it is now considering all its high quality plan to be’bundle” Because, starting in October, it began offering 15 hours of audiobooks for free through its Premium plan.
The move resulted in the company paying lower mechanical royalties to U.S. publishers and songwriters after music publishers and music streaming services agreed that U.S. “bundled” services could Pay lower mechanical royalties.
In April, the State Food and Drug Administration accused the streaming service of “attacking songwriters” after it changed the way it paid mechanical royalties in the United States.
Spotify’s move also triggered a lawsuit from the MLC, a nonprofit organization designated by the U.S. Copyright Office to administer comprehensive compulsory licenses and ensure that music streaming services like Spotify pay the mechanical royalties they owe songwriters and music publishers.
MLC argued that Spotify’s “unilateral and unlawful decision to reduce premium service provider revenue reported to MLC by nearly 50%incorrectly described the service as a different type of subscription service and underpaid royalties.
Starting today, Amazon Music Unlimited Individual Plan subscribers and Family Plan primary account holders can listen to one audiobook of any length once a month through their subscription.
Subscribers can continue listening to monthly programming after the next billing cycle begins, or select new programming. Amazon Music Unlimited is priced at $9.99/month monthly subscription or $99/year Annual subscription for Prime members. Non-Prime customers pay $10.99/month.
Audible’s library contains over 1 million titles in the US catalogAudiobooks.
Spotify’s Premium Personal plan includes 15 hours Audiobooks are priced at $11.99 per month. In June, Spotify announced $10.99 per month basic The U.S. plan does not include Monthly audiobook listening hours.
“The combination of Amazon Music and Audible, two pioneers in audio streaming, gives customers unparalleled audio entertainment options.”
Steve Boom, Twitch/Amazon
“The combination of Amazon Music and Audible, two pioneers in audio streaming, gives customers unparalleled audio entertainment options,” said Steve Boom, vice president of audio, Twitch and gaming at Amazon.
“Amazon Music is redefining audio streaming through the power of Alexa and the introduction of high-definition and spatial music.
“Today, Amazon Music is making Audible’s industry-leading audiobook catalog available to Amazon Music Unlimited subscribers, launching the audiobook category to a whole new audience.”
In August, Spotify asked the court to dismiss MLC’s lawsuit, but MLC issued a formal response to Spotify’s motion in September, urging the court to reject “Spotify’s motion to dismiss comprehensively and with prejudice.”
In its response to Spotify’s motion to dismiss, MLC argued that “the financial impact [of the bundling move] For the music creators on whom Spotify has built its business, that’s huge—the impact is expected to be around $150 million next year alone.
Spotify estimated in July that MLC would have to pay $50 million if it won the bundling lawsuit.
In a regulatory filing with the U.S. Securities and Exchange Commission this month, Spotify noted in the “Contingencies” section that “various legal actions, proceedings and claims are pending, or may be filed or asserted” against the company.
MLC, of course, made such a claim against Spotify in May. According to Spotify’s July filing: “If MLC is fully successful in this case, the additional royalties payable from March 1, 2024 to June 30, 2024 will be approximately 46 million eurosof which approximately 35 million euros Relates to the three months ending June 30, 2024, plus potential penalties and interest that we cannot reasonably estimate.
That 46 million euros The numbers quoted by Spotify convert to Dollar$49.52 million Calculated based on the average quarterly exchange rate published by the European Central Bank.
this 35 million euros [in royalties alone] The three months ended June 30, 2024 (i.e. the second quarter of 2024) converted to $37.68 million.
If Spotify were willing to pay US$37.68 million (35 million euros) Following bundling changes in March that reduce machinery royalties per quarter, SPOT’s machinery royalties will be reduced by approximately US$150 million Over the course of a year, this is US$150 million The MLC cited estimates in its filings.
Most recently, in an SEC filing released after Spotify reported third-quarter financial results last week, Spotify updated the amount it expected to pay (as of the third quarter) if MLC wins the bundling lawsuit.
According to Spotify: “If MLC is fully successful in this case, the additional royalties payable between March 1, 2024 and September 30, 2024 will be approximately 94 million eurosplus potential penalties and interest that we cannot reasonably estimate.” “We intend to vigorously defend this lawsuit,” Spotify added in the filing.
At the average quarterly exchange rate published by the European Central Bank, the €94 million figure cited by Spotify last week translates to An estimated $103.24 million must be paid to the MLC, If MLC wins the bundling lawsuit.
Amazon Music now claims to offer “the largest selection of audiobooks across genres” as well as a slew of Audible originals and exclusives, including Hail Mary Project Author Andy Weir, Classic 1984 Starring Andrew Garfield, Cynthia Erivo and Andrew Scott, “Evergreen Bestseller” can’t hurt me Author: David Goggins.
Audible is also home to the complete library of Harry Potter audiobooks and related stories. The company also recently announced it will co-produce original Harry Potter stories.
Scheduled to launch by the end of 2025, these full-line audio titles will provide immersive audio entertainment through Dolby Atmos’ high-quality sound design.
“The opportunity to extend Audible to Amazon Music subscribers allows us to engage the next generation of listeners through a treasure trove of storytelling.”
Bob Carrigan, “Talkies”
“Audible has revolutionized the way people around the world consume books, and as our category continues to evolve and scale, we’re seeing growing demand for audiobooks,” said Bob Carrigan, CEO of Audible.
“The opportunity to expand Audible to Amazon Music subscribers allows us to engage the next generation of listeners with a treasure trove of storytelling, while Audible’s standalone service will continue to provide audiobook lovers with a superior library and customers through a range of program options Experience. Not enough.
