Spotify has taken the next step in its legal battle with the Mechanical Licensing Collective over whether the streamer’s audiobook offerings allow it to pay less in royalties to musical artists in a Motion to Dismiss, filed in US District Court.
Spotify argues that its Premium subscription service constitutes a “Bundle” under copyright regulations, advocating that the audiobooks provide distinct and significant value, separate from music streaming.
The motion states, “Today, subscribers to Spotify’s flagship ‘Premium’ tier of service have the ability to stream a catalog of over 200,000 audiobooks, as well as Spotify’s industry-leading music catalog, for a single price. This is not merely an add-on but a substantial value proposition that stands independently of the music service offered.”
The MLC challenges Spotify’s “Bundle” classification, implying that the inclusion of audiobooks should not affect the royalty obligations originally established for music streaming alone. MLC argues that audiobooks do not constitute a service distinct enough from music streaming to warrant this categorization and the consequent financial benefits it entails for Spotify.
To this, Spotify’s legal team writes, “MLC’s position is nonsensical and factually unsupportable. And it profoundly devalues the contributions of the tens of thousands of book authors whose works are available with a Spotify Premium subscription – from literary luminaries, to mainstays on best sellers lists, to up-and-coming writers who are finding their audience.”
As Spotify leverages legal definitions to support its stance, it says, “MLC’s efforts to manufacture factual disputes where there can be none fall well short of the mark, as discussed below. Because MLC has failed to state—and cannot state—a plausible claim to relief, its complaint should be dismissed with prejudice.”
Given the stakes, this case will likely carry direct legal implications for the broader impact of copyright law within the digital content market.
