Spotify’s First Post-Bundled Royalty Statements Have Arrived — 97% of All Subscription Accounts Are Now Lower-Paying Bundles

The Scale of the Bundling Shift

According to preliminary royalty statements reviewed by Digital Music News, Spotify has reclassified approximately 97% of its US subscription accounts into bundled plans, a dramatic increase from previous months. This includes nearly all Family and Duo plans, alongside a substantial portion of Individual subscriptions. In the March reporting period alone, over 20 million Individual accounts were transitioned into bundled categories, up from just 869,912 remaining non-bundled Individual accounts in the same period. The February 2024 statements, which represented the last full month of predominantly non-bundled reporting, showed Individual subscriptions topping 20.16 million in the US — a figure now largely migrated to bundle-linked tiers.

The bundling surge is most evident in Duo and Family plans. Spotify reported 4.17 million audiobook-bundled Duo accounts in March 2024, up from 3.86 million in February. Similarly, audiobook-bundled Family accounts rose to 5.65 million from 5.27 million over the same window. Sources indicate that virtually non-bundled Duo or Family plans remain in the official tallies, with any residual numbers likely attributable to reporting anomalies rather than substantive user choice. This near-total conversion underscores the systematic nature of Spotify’s bundling push, which appears designed to standardise access to audiobook content across its subscription ecosystem.

Critically, these shifts are not merely administrative. They carry direct financial implications for rights holders, as bundled subscriptions generate lower per-stream mechanical royalties than standalone music tiers. The reclassification effectively reduces the revenue pool available for distribution to publishers and songwriters, even as Spotify’s overall subscriber base and pricing continue to rise.

Financial Impact on Publishers and Songwriters

Early industry estimates had projected that Spotify’s bundling strategy would reduce annual mechanical royalty payments to publishers by approximately $150 million. However, based on the preliminary data from March 2024 statements, Digital Music News’ analysis suggests the actual decline may now exceed $160 million per year in the United States alone. This adjustment reflects the deeper-than-anticipated penetration of bundles into the Individual plan segment, which carries higher per-user value than Family or Duo tiers when unbundled.

The financial strain comes at a time when Spotify is simultaneously increasing its revenue through price hikes. The platform’s recent subscription price increases in the US are projected to generate at least an additional $500 million annually, according to internal estimates cited by Digital Music News. Yet, due to the bundling-driven dilution of royalty rates, music publishers are unlikely to see a proportional share of this uplift. Instead, the gains appear to be accruing primarily to Spotify, widening the gap between platform profitability and creator remuneration.

This dynamic has intensified tensions between Spotify and music rights organisations. The NMPA has characterised the bundling shift as a ‘war on songwriters,’ accusing the streaming service of undermining the value of musical works through opaque reclassification practices. David Israelite, chief executive of the NMPA, has pledged a multi-pronged response, including litigation, regulatory engagement, and advocacy for federal legislation that would enable direct negotiations between publishers and digital service providers (DSPs).

Legal and Regulatory Pushback

The bundling controversy has already triggered formal legal action. The Mechanical Licensing Collective (MLC) has filed a lawsuit challenging Spotify’s bundling reclassifications, seeking to recover unpaid royalties and establish clearer accounting standards for bundled offerings. Simultaneously, the NMPA has lodged complaints with the Federal Trade Commission (FTC) and various state attorneys general, alleging that Spotify’s bundling practices constitute ‘unfair and deceptive’ behaviour under consumer protection laws.

Beyond litigation, the NMPA is advocating for legislative reform to address the power imbalance between DSPs and music creators. Israelite has highlighted the need for federal laws that would allow publishers to negotiate licence terms directly with platforms like Spotify, rather than relying on compulsory licensing models that may not reflect market realities. The organisation is also supporting an MLC-led audit of Spotify’s royalty systems to identify potential discrepancies in payment reporting, particularly concerning the use of music in podcasts, lyrics, and video content — areas where bundling may further obscure usage tracking.

Spotify has maintained that its bundling approach aligns with industry norms and that users are adequately informed of changes via advance notifications and opt-out mechanisms. The company points to the availability of lower-cost, music-only options in certain markets — such as the UK, where subscribers can access Individual plans for £10.99 by forgoing audiobooks — as evidence of consumer choice. However, US-based analysts note that comparable transparency and flexibility have not yet been replicated domestically, leaving many users unaware of alternative tiers until after bundling has been applied.

What this means

Spotify’s transition to near-universal bundling in the United States marks a pivotal moment in the economics of music streaming. While the platform continues to grow its revenue base through price increases and subscriber expansion, the associated decline in royalty payouts threatens to widen the divide between platform success and creator sustainability. For music publishers and songwriters, the fight is no longer just about fair compensation per stream — it is about whether the fundamental mechanics of streaming economics can adapt to bundled models without eroding the value of musical works. As legal battles unfold and regulatory scrutiny intensifies, the resolution of this dispute may well determine whether the future of music streaming prioritises access and convenience at the expense of those who create the content that drives it.