Music publishers accuse Spotify of ‘bait-and-switch subscription scheme’

Spotify has once again faced backlash from the music industry. The National Music Publishers’ Association has urged the Federal Trade Commission to investigate the streaming service’s decision to include audiobook content in all of its paid subscription plans. According to the group’s FTC complaint, Spotify’s recent actions are seen as an attempt to boost profits by misleading consumers and exploiting the music royalty system.

The controversy stems from Spotify’s announcement in November 2024 that it would include 15 hours of audiobook content in all Premium subscription plans. Subsequently, the company introduced a new audiobook-only subscription for $10 a month, offering the same amount of listening hours. The NMPA alleges that Spotify’s price hikes are tied to the addition of audiobook content, resulting in subscribers being charged for a service they didn’t choose and cannot opt out of without switching to the free, ad-supported option.

Furthermore, the NMPA claims that the increased revenue from higher Premium subscription fees may not benefit music composers. The FTC complaint suggests that Spotify could pay approximately $150 million less in music royalties during the first year of these bundled Premium plans.

The NMPA’s letter describes the new audiobook-only plan as a “sham” designed to artificially inflate the value of Spotify’s Premium Plan. The Audiobook Access Plan costs only $1 less than the Premium Plan, despite offering the same audiobook content and music.

In response to the allegations, a Spotify spokesperson told Engadget:

“Spotify’s approach to expanding its offering and raising prices is industry standard. We notify users a month in advance of any price increases and offer easy cancellations as well as multiple plans for users to consider. In short, we categorically reject the NMPA’s baseless accusations and will continue to provide consumers incredible value and a best-in-class experience.”

It remains to be seen whether this controversy will impact Spotify’s planned changes to its royalty model. Artists and publishers have long criticized the streaming platform for underpaying the creatives responsible for the music.

Update, June 13 2024, 3:15PM ET: This article has been updated to include Spotify’s response to the NMPA’s claims.