U.S. music publishers and songwriters have lost nearly $500 million in mechanical royalty payments since Spotify and Amazon rolled paid music subscribers into bundled plans with audiobooks, according to the National Music Publishers Association (NMPA).
Billboard’s analysis of Spotify’s reports to the Mechanical Licensing Collective found that the blended per-stream mechanical rate for subscriber tiers decreased 51%, from approximately $0.00068 per stream in Q4 2023 to $0.00033 per stream in Q4 2025. Overall mechanical dollar payments declined 45%, from $97.3 million to $53.3 million over the same periods. The discrepancy reflects a roughly 19.3 billion stream increase across Spotify’s subscriber base during the period, from about 143.6 billion streams in Q4 2023 to about 162.9 billion in Q4 2025.
Bundling allows Spotify to attribute revenue differently by allocating only the music subscription portion of the bundled price to the mechanical royalty calculation. This reduces the total revenue pool against which the headline rate (15.25% in 2025) is applied. In 2025, the total content cost pool (24.50%) became the dominant factor in determining the all-in royalty pool in most calculations, whereas revenue was the dominant factor in 2023.
The mechanical payment formula also uses a 33-cent-per-qualified-subscriber floor for bundled tiers. In 2023, this floor never determined final payments across seven paid tiers. In 2025, across 57 calculations for 19 paid tiers, the floor determined mechanical payments 26 times, including for Spotify’s second- and third-largest paid tiers, the bundled Family and Duo Audiobooks tiers.
Spotify acknowledged a potential €410 million ($471 million) liability in its financial statement for the period ending March 31, 2026, covering March 1, 2024 through March 31, 2026, if an amended Mechanical Licensing Collective lawsuit succeeds. The bundling issue is expected to feature prominently in the Copyright Royalty Board’s ongoing Phono V rate determination covering 2028–2032.
Beginning in 2026, Spotify has offered direct licensing deals through the NMPA and Harry Fox Agency for video and lyric rights not covered by the compulsory mechanical license. Some independent publishers say these payments have exceeded expectations and partly offset losses tied to bundling, though the NMPA maintains the underlying bundling deficit remains.
Source: Billboard