Spotify's audiobook "bundle" still costs songwriters, and the MLC just lost its shortcut

Songwriters who hoped a higher court would quickly overturn Spotify's audiobook "bundle" will have to keep waiting. In an order dated 1 September 2026, Judge Analisa Torres of the Southern District of New York refused the Mechanical Licensing Collective (MLC) permission to appeal her earlier ruling straight away. In the same order she struck Spotify's "unclean hands" defence. Music Ally called it a mixed ruling. For writers it is mostly a delay.

How did we get here?

In March 2024 Spotify began reporting its Premium plans as bundles, after adding 15 hours a month of audiobook listening, according to Music Business Worldwide. Under the 2022 Phonorecords IV settlement, bundles pay a lower US mechanical royalty than standalone music subscriptions. Mechanical royalties are the share that goes to songwriters and their publishers, so the change cut what writers earn from the same streams.

The MLC, which administers the US blanket mechanical licence, sued on 16 May 2024. On 29 January 2025 the judge dismissed that first complaint. She held that Premium meets the regulation's definition of a Bundle: a subscription offering combined with "one or more other products or services having more than token value", bought in a single transaction. She later let the MLC file an amended complaint, filed on 1 October 2025. It argues that Spotify underpaid on its standalone Audiobooks Access plan and miscalculated what it owes on Premium.

How much writers lost was always an estimate. Steve Bogard, a hit country songwriter and longtime board president of the Nashville Songwriters Association International, told NewsChannel 5 the loss could reach $150 million in the following year. He also said publishers earning less can't afford to sign new writers. Spotify told the station it expected to pay publishers more in 2024 than in 2023 and that other services also pay lower rates on bundles.

What did the September order decide?

No early appeal. The MLC asked the court to certify an interlocutory appeal, which would let the Second Circuit review the bundle question before the case ends. The order says such appeals need a "substantial ground for difference of opinion". The MLC cited no conflicting cases, the judge wrote, and although the question is new in the circuit, it is not "particularly difficult". She restated that the plain text of the regulation is unambiguous.

No "unclean hands". Spotify had argued that the MLC treated it unfairly by challenging Spotify's bundle reporting but not other services' music-and-audiobook bundles. The judge said this defence "has no basis in law". The statute authorises the MLC to enforce the licence but doesn't require it to pursue every licensee in the same way at the same time. She also noted that Spotify hadn't alleged any fraud or deceit by the MLC.

So the case continues on the amended claims. The core question, whether Premium is a bundle at all, can only reach an appeals court after a final judgment.

What is at stake in money?

Spotify's own numbers are the best guide. In its 6-K for the quarter to 30 June 2026, Spotify says that if the MLC were "entirely successful" in arguing that Premium is not a bundle, the liability for 1 March 2024 to 30 June 2026 would be about €473 million, plus penalties and interest it can't estimate. It adds that any liability would be partly offset by direct deals with publishers. A year earlier, MBW reported, Spotify's August 2025 filing put the figure for March 2024 to June 2025 at about €256 million.

Taking the two figures together, that implies about €217 million for the twelve months to June 2026 alone. That is our arithmetic from Spotify's own numbers, not a figure Spotify gave. The gap gets bigger every month the case stays open.

Meanwhile, Premium got more expensive. Ars Technica reported in January that US Premium would go from about $12 to about $13 a month from February, with Duo, Family and Student plans rising too. Ars counted it as Spotify's third price rise since July 2023. Spotify said the change would help it "benefit artists".

What we think

The September order is a procedural loss for the MLC, but the bigger problem is structural. The bundle discount is now settled law in the district court, and the €473 million figure in Spotify's filing depends on exactly the argument the MLC can't take to an appeals court yet. Writers are waiting on the slow route, and Spotify keeps the lower rate while they wait.

The price rises make this worse. "Subscribers pay more, creators earn more" was the pitch for streaming price rises. When a price rise lands on a plan classed as a bundle, part of the extra money is attributed to audiobooks, and the songwriter's share is calculated on what's left. We can't say from public data how much of the February rise reached writers. Spotify hasn't broken that out, and it should.

There is also a split between writers. MBW reports that the publishing arms of all three majors now have direct US deals with Spotify, and that the Universal and Warner Chappell deals override the bundle discount. Writers signed to those publishers have some protection. Independent writers and small publishers who rely on the statutory rate don't. Of everything in this case, that is the part we find hardest to defend: the bundle discount ends up landing mainly on the writers with the least bargaining power.

The real fix is regulatory, not a court case. The Copyright Royalty Board opened Phonorecords V in December 2025 to set mechanical rates for 2028 to 2032. That proceeding is where the bundle rules, including how little "more than token value" has to mean, can be rewritten. Writers' groups should treat the bundle definition as their first priority there, not an afterthought to the headline per-stream rate.

Sources

• Order, Mechanical Licensing Collective v. Spotify USA Inc., 24 Civ. 3809 (AT), ECF No. 183, S.D.N.Y., 1 Sep 2026
• Spotify Technology S.A., Form 6-K, quarter ended 30 June 2026, SEC EDGAR
• Phonorecords V, notice of commencement, Copyright Royalty Board, December 2025
• Court issues mixed ruling in latest Spotify-MLC legal skirmish, Music Ally, 7 Sep 2026
• MLC vs. Spotify bundle battle intensifies as streamer opposes immediate appeal, Music Business Worldwide, 14 Jan 2026
• Spotify's 3rd price hike in 2.5 years hints at potential new normal, Ars Technica, 15 Jan 2026
• Spotify's decision to 'bundle' music with audiobooks is costing Nashville songwriters, publishers, NewsChannel 5 Nashville