New Spotify subscription tiers inadvertently confirm the value of music

After Spotify raised the price of premium subscriptions in the US twice in the last year, the company has added new plans with and without audiobooks.

The popular Premium individual plan will continue to cost $11.99 per month and offer 15 hours of audiobook enjoyment, while a new Basic individual plan removes free audiobooks for $10.99 per month, just $1 less.

Spotify Duo and Family plans include 15 hours of audiobooks, but only for the “plan manager.” All plans include podcasts, 99% of which are available on multiple free platforms.

91.67% of Spotify’s value is music

By setting the price of music-only subscriptions at $10.99 and charging a $1 premium to add audiobooks, Spotify is tacitly admitting that 91.67% of the value of its typical $11.99 subscription is music.

But when it comes to the amount of royalties Spotify wants to pay for music, it evaluates it very differently.

The streamer recently reclassified its premium single, duo and family subscriptions as “bundled subscription offers,” which allows it to pay songwriters and music publishers less thanks to appropriate language in its contracts.

According to the National Music Publishers Association (NMPA), songwriters will lose more than $150 million annually as a result of Spotify’s reclassification. The Mechanical Licensing Collective (MLC) takes a similar view and has filed a lawsuit against Spotify demanding the outstanding royalties owed to it under its mandatory Mechanical blanket license.

Bruce Houghton is founder and editor of Hypebot, senior advisor at Bandsintown, president of Skyline Artists Agency, and professor at Berklee College of Music.