According to a stinging complaint filed with the Federal Trade Commission, the site is using audiobooks to demand higher prices and pay publishers less.
A new round of criticism has been directed on Spotify by the music business. The Federal Trade Commission has been requested by the National Music Publishers Association to investigate the streaming service’s decision to incorporate audiobook content into all of its paid membership tiers. As stated in the complaint filed by the organization with the Federal Trade Commission, the recent moves taken by Spotify are a part of “a scheme to increase profits by deceiving consumers and cheating the music royalty system.”
This requires some background information. In November of 2023, Spotify made the announcement that it would incorporate 15 hours of audiobook content with all of its Premium subscription rates. Several months later, the firm introduced a new subscription service that focuses just on audiobooks and provides the same amount of listening hours for a monthly fee of ten dollars. The organization representing publishers asserts that Spotify’s recent price increases are a result of the company’s decision to provide additional audiobook content. Furthermore, the organization asserts that paying customers are being charged automatically for a service that they did not choose and cannot opt out of without switching to the free listening experience that is supported by sponsored advertisements.
Moreover, it is possible that the music creators would not receive the increased cash that is generated by the higher premium subscription rates. Spotify will pay approximately $150 million less in music royalties over the course of the first year of these new bundled Premium subscriptions, as stated in the complaint filed with the Federal Trade Commission.
In its letter, the National Music Publishers Association (NMPA) goes so far as to refer to the new audiobook-only plan as “a sham.” The letter states that the purpose of the plan is to enable Spotify to assert that audiobook content is a significantly and independently valuable component of its ‘bundled’ Premium Plan. This is because the Audiobook Access Plan costs only one dollar less than the Premium Plan, which includes the exact same audiobook content and music.
Given the current state of affairs, it is difficult to determine whether or not this issue will have an effect on the proposed reform of Spotify’s royalties scheme. On a regular basis, artists and publishers have voiced their disapproval of the streaming ecosystem as a whole, and Spotify in particular, for not adequately compensating the creatives who are responsible for the music.