Two Senators are calling on federal regulators to investigate Spotify’s controversial subscription bundling strategy, which they say is depriving music publishers of hundreds of millions of dollars in royalties while forcing consumers into higher-priced plans.
In a letter released Friday, Marsha Blackburn (R-TN) and Ben Ray Luján (D-NM) criticized Spotify’s move to automatically convert all premium music subscribers into bundled subscriptions that include audiobook streaming, without direct consent from users. By doing so, they say Spotify not only increased subscription fees but also qualified for a lower mechanical royalty rate under US law, cutting payments to the music industry.
Spotify’s bundling plan, launched last year, added 15 hours of audiobook streaming to its premium music plans and raised monthly fees to $11.99 for individuals and $19.99 for families. Although subscribers can opt out, the National Music Publishers Association estimates that the bundling cost songwriters and publishers roughly $230 million in lost royalties last year alone.
The senators noted that Spotify eventually introduced a music-only “Basic Plan” in response to public backlash, but said the option remains difficult to access and is unavailable to new subscribers. In addition to raising concerns about consumer choice, Blackburn and Luján argue that Spotify’s bundling scheme undermines the structure of the U.S. music royalty system by exploiting regulatory loopholes.
In February, a federal judge threw out a lawsuit filed by the Mechanical Licensing Collective that argued Spotify unlawfully cut royalties by up to 50% through the reclassification. The National Music Publishers Association and Nashville Songwriters Association International criticized the move, calling it harmful to creators.
Judge Analisa Torres ultimately ruled Spotify’s bundling complied with existing regulations, finding audiobooks provide more than “token value.”
