Spotify has launched a new music-only subscription tier called Basic Individual, which doesn’t offer access to audiobooks.
The new tier appears to be available in the UK only at present and costs £10.99 per month.
In the UK, Spotify’s Premium Individual tier, which includes 15 hours of audiobook listening per month, costs £11.99.
Spotify increased the price of its flagship Premium subscription plan in the UK to £11.99 in April, up from £10.99.
Spotify’s full range of plans in the UK can be seen below:
On Monday (June 3), Spotify announced that its individual Premium tier is also going up by $1 per month in the United States to $11.99.
According to Spotify, over the next month, existing US-based subscribers will receive an email about the update, explaining that the new subscription price will come into effect on their billing date in July.
On Spotify’s Q1 earnings call on April 23, Spotify co-founder and CEO Daniel Ek confirmed that a new ‘music-only’ subscription tier is coming to the platform, but didn’t confirm when or in which markets.
The tier’s arrival in the UK and the £10.99 price point indicate that it will also cost $10.99 in the United States when it eventually launches in the US.
Spotify’s new Basic Individual (aka music-only) tier in the UK has been quietly launched amid a fierce debate between the music streaming platform and music publishers in the United States over SPOT’s decision to reclassify its Premium tiers as ‘bundles’ by combining music and audiobooks.
The move has resulted in Spotify paying a lower mechanical royalty rate in the US to publishers and songwriters for Premium than standalone music subscription services.
Under a 2022 legal settlement – aka Phonorecords IV – music publishers and music streaming services agreed that ‘bundle’ services in the States are permitted to pay a lower mechanical royalty rate to publishers and songwriters than standalone music subscription services.
In October, Spotify started offering 15 hours worth of audiobooks with its Premium plans for free, in other words, ‘bundling’ access to audiobooks with its Premium services.
Spotify then launched a $9.99 per month standalone audiobook tier in March in the US. Subscribers to this tier don’t get Spotify Premium access, though they can access an ad-supported music experience.
On May 16, the US-based Mechanical Licensing Collective (The MLC) sued Spotify for allegedly underpaying royalties to songwriters and publishers as a result of it reclassifying its Premium services as bundles.
The MLC is the non-profit organization designated by the US Copyright Office to ensure that music streaming services like Spotify pay the mechanical royalties they owe to songwriters and music publishers.
The MLC argues in its lawsuit, which you can read in full here, that by applying the rate formula applicable to Bundles to its Premium subscriptions, Spotify is underpaying royalties due to songwriters and publishers, and that Spotify’s position does not comply with the law.Music Business Worldwide