Audiobooks are a Spotify scam to cheat consumers and musicians, say music labels

Including audiobooks in the premium tier is nothing more than a Spotify scam, say music publishers, intended to cheat consumers and music labels alike.

It says the sole purpose of adding audiobooks into the subscription was to find an excuse for charging consumers more while paying music labels less …

Here’s what Spotify did

The complaint may solve a mystery we raised last year. Let’s start with a quick recap …

• Spotify Premium charges for music without ads, and pays a royalty to music labels
• The company last year starter including some audiobook listening
• It later offered an audiobook-only tier for just $1 less
• It subsequently increased the cost of Spotify Premium

We covered the audiobook news at the time, in a piece entitled Spotify audiobooks now available in standalone $9.99 tier – but nobody knows why.

But music labels say they now know the reason …

Music labels say this is a scam

The National Music Publishers’ Association (“NMPA”) has made a formal complaint to the Federal Trade Commission (FTC).

First, it says, consumers were scammed.

Spotify has deceived consumers by converting millions of its subscribers without their consent from music-only subscriptions into “bundled” audiobook-and-music subscriptions, publicly announcing increased prices for those subscriptions, failing to offer an option for subscribers to revert to a music-only subscription

Second, it says Spotify is also cheating music labels, and thus artists and composers.

Spotify now pays significantly less in royalties to music publishers and songwriters under the assertion that its Premium Plan subscribers are all paying for a bundled-content subscription and that audiobooks comprise a valuable aspect of that subscription. In fact, Spotify will pay approximately $150 million less in music royalties during the first year that the new “bundled” Premium Plans are in effect than what it previously paid in royalties for music-only Premium Plan subscriptions.

Finally, it says that competitors like Apple Music are harmed, because they have to compete with a service paying lower royalties.

Audiobook-only tier is a sham

The NMPA says that this was the only reason Spotify launched the audiobook-only tier. We said at the time that it made no sense for anyone to subscribe to it, and the association provides further evidence.

The sham nature of the Audiobooks Access Plan is obvious from the fact that it is impossible to find on Spotify’s website and is not listed as part of Spotify’s subscriptions […]

Indeed, if a user clicks on the “Available plans” button on Spotify’s website, it navigates to a page that does not even list the Audiobook-only subscription.

The plan’s sham nature is also apparent from the fact that it is priced far above comparable products offered by competitors, such as AudiblePlus, which offers unlimited audiobook listening for just $7.95 per month.

We’ve reached out to Spotify for comment, and will update with any response.

Photo by @felipepelaquim on Unsplash