When Bloomberg reported that Spotify would be upping the cost of its premium subscription from $9.99 to $10.99, and including 15 hours of audiobooks per month in the U.S., the change sounded like a win for songwriters and publishers. Higher subscription prices typically equate to a bump in U.S. mechanical royalties — but not this time.
By adding audiobooks into Spotify’s premium tier, the streaming service now claims it qualifies to pay a discounted “bundle” rate to songwriters for premium streams, given Spotify now has to pay licensing for both books and music from the same price tag — which will only be a dollar higher than when music was the only premium offering. Additionally, Spotify will reclassify its duo and family subscription plans as bundles as well.
It’s worth noting though, that Spotify has been bleeding money since the start. I know they may be wasting a lot of money on side hustles but still. They’re not raking home any money. The only way the founders got rich is by the overinflated stock price.
E: typo
I think they actually just started making a profit.