The Cost of Spotify Bundling—$230M This Year, $3.1B Through 2032 Says NMPA

Photo Credit: Thibault Penin

At the National Music Publishers’ Association (NMPA) annual meeting held in Alice Tulley Hall at New York’s Lincoln Center, the organization revealed the true cost of Spotify’s bundling scheme to publishers and songwriters.

According to the NMPA, the bundling change—which reclassifies Spotify Premium as a bundle including audiobooks—cost songwriters and publishers a staggering $230 million in lost revenue in the first year alone. The NMPA warned that if the practice is not stopped, the cumulative loss is projected to surpass $3.1 billion through 2032.

The core issue stems from the way mechanical royalties are calculated for bundles versus unbundled subscriptions. Under the 2022 Phonorecords IV legal settlement, bundled services are permitted to pay a significantly lower mechanical royalty rate to publishers and songwriters than standalone music subscriptions. When Spotify began rolling out its bundled music and audiobooks subscription, it triggered a precipitous decline in royalty payments.

For example, on Spotify’s individual plan, mechanicals payable dropped from $15.78 million in pre-bundling February to just $9.58 million in post-bundling March—a clear illustration of the revenue lost due to this bundling practice.

The NMPA’s long-term projections are even more concerning. While recent estimates focus on the immediate and near-term losses—such as the $230 million lost in the first year—the association cautioned that if left unchecked, the practice would result in cumulative losses of $3.1 billion for publishers and songwriters by the end of the next Copyright Royalty Board (CRB) rate-setting period in 2032. This new figure dwarfs those earlier estimates that focused only on the next few years.

Sony Music Publishing has reported that mechanical royalty payments from Spotify have dropped by about 20% since the bundling change. Industry leaders including CEO & President David Israelite emphasized how the practice undermines the financial stability of songwriters and publishers, as well as the broader stability of the music ecosystem. In the past, Israelite said Spotify’s recent revenue growth is in part “being subsidized by US songwriters.”

Israelite called on the industry, from executives to songwriters to artists, to stand together. “We should all stand behind [songwriters]…there has never been a greater need to stand up for the value of songwriters.”

NMPA General Counsel Danielle Aguirre warned, “One of the biggest challenges [for interactive streaming income] continues to come from Spotify’s mischaracterization of its music service into bundles, which forced the conversion of over 44 million subscribers into bundled platforms that those subscribers did not request.”

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