Photo Credit: Danielle Aguirre, NMPA Chief Legal Officer & Chief Operating Officer

Spotify and Amazon’s bundling strategy has had a major impact on music publishers’ royalty haul, resulting in nearly $500 million in lost royalties since 2024.

The National Music Publishers’ Association (NMPA) revealed some worrying data tied to the sustained hit the industry has taken from streaming providers’ “bundles.” As Spotify (and similarly, Amazon Music) started reclassifying its “premium” subscription tiers as a bundle with other services such as audiobooks, royalties paid by both companies have been cut by approximately 30% over the past two years.

According to NMPA Chief Legal Officer and Chief Operating Officer Danielle Aguirre, by Spotify’s own admission, reclassifying its subscription offerings as a bundle has cost songwriters and publishers approximately $480 million since introducing the practice in 2024.

The problem stems from the fact that combining various offerings into one package alongside music services dramatically lowers the statutory amount owed to music publishers. That reduction in mechanical royalty rates has subsequently lowered payments, including a $230 million loss in the first year alone.

As a result, the streaming provider-wide royalty distribution flipped from 55% mechanical and 45% performance in 2024 to nearly 53% performance and 47% mechanical today. Specifically, U.S. publishing revenues in 2025 broke down to synchronization at 24%, mechanical royalties at 19%, performance royalties at 52%, and other sources at 5%.

“What was in 2024, a DSP-wide royalty distribution of 55% mechanical to 45% performance has flipped to now 53% performance and 47% mechanical due solely to the bundling implemented by Spotify and Amazon,” said Aguirre.

“This is concerning because mechanical royalties […] are paid through the MLC, and the MLC does not take out a commission or any fee from you for administration of mechanical rights,” Aguirre added. “You are receiving 100% of them.”

The MLC sued Spotify back in 2024, alleging that the streamer was underpaying mechanical royalties after reclassifying its subscriptions as bundles that included audiobook access. But the case was dismissed in January 2025 and then reinstated in September after the MLC appealed.

Notably, Spotify has subsequently signed deals with a number of major publishers (as well as the NMPA and its various members) in a bid to improve songwriter remuneration. However, those deals mainly compensated in other areas, with Spotify essentially agreeing to pay a new, separate stream of royalties to publishers in exchange for hosting and streaming music videos and other video-related features.

“All parties have expressed an interest to come to the table and discuss how to fix bundling issues and to move forward as partners,” said Aguirre. “That is a welcome first step. But what really counts are actions.”

To that end, Aguirre said that deals negotiated and settled by NMPA in the past year have returned around $110 million to its members.