How Spotify’s Price Hike Means LESS Money For Songwriters

Despite a price hike for Spotify users, US songwriters are set to be paid less money, rather than more, next year.

Adding audiobooks into so-called “bundles”, Spotify are claiming they qualify for a US mechanical royalty rate discount, as they have to pay licensing fees for both music and audiobooks. 

According to calculations by Billboard, songwriters and publishers will earn an estimated $150 million less in mechanical royalties from Premium, Duo and Family bundles over the next 12 months. These calculations took into consideration Spotify’s revenue, label fees, performance royalty rates, and a range of other factors.

David Israelite, president of the National Music Publishers’ Association, told Billboard that the association will be “looking at all options” to fight this change. “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,” he said.

This change comes after the streaming giant announced they would no longer be paying royalties for songs with under 1,000 streams – much to the outrage of indie artists, who generated about half of Spotify’s revenue last year.

Spotify also announced that users will be a few dollars more out of pocket each month with a change in pricing following the addition of a “basic” tier.