Spotify Audiobook Inclusion: Royalty Concerns Spark NMPA's FTC Complaint.

by Voinea Laurentiu

In a move that has sparked controversy within the industry, Spotify recently announced its decision to include audiobook content in all Premium subscription plans. The National Music Publishers' Association (NMPA) swiftly criticized this strategy and called for Federal Trade Commission intervention. They argue that by adding these features without providing an opt-out option, consumers are being forced into free ad-supported listening experiences instead of the paid premium service they signed up for - a claim Spotify vehemently denies.

In November 2023, as part of its planned overhaul in royalty models and to address longstanding grievances from artists and publishers against streaming platforms undercompensating creators behind the music enjoyed by listeners worldwide, Spotify announced that it would add an additional 15 hours of audiobook content into all Premium subscription plans. The company also introduced a $10-a-month standalone plan offering identical listening hours as part of their bundled offerings - seemingly to further entice consumers with added value at minimal cost increase, according to the NMPA's allegations.

The music publisher organization argues that Spotify is using this strategy not only for boosting profits but also potentially misleading customers and exploiting music royalty systems in an unethical manner - a claim backed by their FTC complaint, which estimates the move could result in $150 million reduction of royalties paid to composers over one year.

"Spotify's decision is nothing more than smoke-and-mirror tactics designed solely for profit maximization," said an NMPA representative during a press conference, expressing their concerns about the impact on creators and consumers alike. "We believe this move will have far-reaching consequences that could ultimately undermine trust in streaming platforms."

The FTC complaint also criticizes Spotify's audiobook-only plan as being a sham, designed to bolster perceived value of their bundled Premium Plan by offering nearly identical content at just $1 less than the combined subscription. This move has left industry observers uncertain about how it will affect future royalty models and whether this controversy might prompt further scrutiny from regulatory bodies or even lead Spotify to reconsider its strategy in light of mounting pressure from artists, publishers, and consumers alike.

As the debate rages on between those who see value added by audiobooks for music lovers - particularly during times when live concerts are not possible due to unforeseen circumstances like a global pandemic or other crises- versus critics arguing that Spotify's actions amount to an exploitation of consumers and creators, the outcome remains uncertain.

The FTC complaint filed by NMPA has certainly shone a spotlight on this issue - one which may ultimately force streaming platforms like Spotify to reassess their strategies in order to maintain trust with both artists and listeners alike while ensuring fair compensation for all parties involved.