Spotify Introduces Music-Only Subscription Tier in the US
- Martina
- 04 July 2024, Thursday
After persuading 97% of its long-time Premium subscribers to switch to its bundled offering, Spotify has now officially launched a music-only subscription plan, pressuring the remaining subscribers to make the switch.
An unappealing music-only ‘Basic’ subscription
This news follows the June announcement that the music-only subscription tier is now available in the UK. These changes to Spotify’s offering stem from its controversial decision to bundle its Premium subscription with audiobook access, which sparked significant backlash from publishers and songwriters.
As we explained in our previous article covering the topic, a 2022 legal agreement between music publishers and music streaming services allows bundled services in the US to compensate publishers and songwriters with lower mechanical royalty rates than standalone music subscriptions.
Despite this agreement, publishers and songwriters have been angered by Spotify's actions. The situation eventually culminated in the Mechanical Licensing Collective (MLC) filing a lawsuit against the streaming platform for underpaying royalties due to its bundling scheme.
In response to the legal dispute, Spotify has decided to introduce a music-focused ‘Basic’ subscription that excludes access to audiobooks. The Spotify Basic subscription is priced at $10.99 per month — just $1 less than the Premium subscription, which includes up to 15 hours of audiobook access. It’s important to note that the subscription tier is only available to individual subscribers — music-only subscriptions for couples or families are not possible. This makes the new offering less attractive overall.
It remains uncertain how much Spotify will promote the new Basic plan or the option to switch to it, should Premium subscribers want to. As of the time of writing, the Basic Plan is not featured on Spotify’s subscription page or FAQs.What’s more, new accounts cannot be created under this tier — only current US Spotify users are eligible to subscribe to the plan.
Nonetheless, Spotify can now claim that there is an option available for users who are unhappy about its bundled offering that pays lower royalties to publishers and songwriters. Whether this will be enough to resolve the ongoing legal disputes with the MLC remains to be seen.
