© Tiffany Hagler-Geard/Bloomberg
Songwriters are erupting in outrage as Spotify plots a payment maneuver that could slashed their royalties by $150 million dollars per year. The streaming giant recently announced plans to bundle audiobooks together with existing music subscriptions, allowing them to pay lower rates than what songwriters had negotiated.
Few expected the growing audiobook segment on Spotify would lead to such a seismic shift. But by reclassifying subscriptions as an all-inclusive “bundle,” Spotify now claims eligibility for steep royalty discounts set out by regulators years ago. The move seemingly flies in the face of recent rulings meant to boost songwriter incomes in the digital era.
Record earnings for Spotify are fueling resentment in Nashville. As Daniel Ek, Spotify’s founder, cashed out $180 million in November, songwriters saw the writing on the wall. An estimated $150 million annual loss in mechanical royalties would flow directly out of their pockets and into corporate coffers. The sums Ek pocketed eerily aligned with what Spotify seeks to slash from songwriter checks each year.
Leading organizations were quick to cry foul. The National Music Publishers Association (NMPA) decried the “cynical, unlawful move” while the Nashville Songwriters Association (NSAI) slammed it as bad faith bargaining that “negates gains awarded to songwriters.” The Association of Independent Music Publishers called it a “deeply cynical” power grab set to starve smaller publishers.
Creators wonder why Spotify opts for payment pools when profits pour in. As one advocates put it – “Every time we think we’ve made progress, Spotify disappoints.” With a united front forming, songwriters vow to fight the proposal with “all options on the table.”
