Spotify faces complaint over alleged deceptive subscription scheme after launching audiobooks in Premium: Tech: Tech Times

Music publishers have made serious accusations against Spotify, alleging that the streaming giant engaged in a deceptive subscription scheme.

This controversy stems from Spotify's decision to integrate audiobook content into its paid subscription plans, which has drawn scrutiny and criticism from the industry.

Spotify receives backlash for misleading subscription system

In a bold move that sparked controversy within the music industry, Spotify integrated audiobook content into its paid subscription plans, sparking allegations from the National Music Publishers' Association according to which are deceptive practices aimed at increasing profits while undermining music royalties.

The association filed a formal complaint with the Federal Trade Commission (FTC), accusing Spotify of exploiting audiobooks to inflate subscription costs without adequate transparency for consumers or fair compensation for music creators.

The development reignites long-standing tensions over fair compensation in the streaming era, shedding light on Spotify's evolving business strategies and their implications for both consumers and music industry stakeholders.

Spotify announced in November that it would integrate 15 hours of audiobook content into all Premium subscription plans. The company initially assured users that no action was necessary on their part.

Audiobooks designated as “Included in Premium” would be instantly playable. Premium subscribers had 15 hours, or about two audiobook equivalents per month. If users exceed this limit, they can purchase a 10-hour recharge for $12.99. Spotify also offers another option: the audiobook access tier.

Initially available in the United States, the Audiobook Access Tier offers 15 hours of audiobook listening per month for $9.99. Subscribers can access Spotify's vast library of over 200,000 tracks while still being able to listen to ad-supported music on the free tier.

Also Read: Spotify to Launch More Expensive Premium Plan for $5 More Per Month – What’s New?

Deceptive tactics and royalty issues

The publishers' organization argued that Spotify's recent price hikes are linked to added audiobook content, and that users are automatically charged for a service they did not select and cannot unsubscribe without upgrade to the ad-supported free listening option.

Spotify's increase in premium subscription fees may not benefit music composers. The FTC complaint alleged that Spotify could pay approximately $150 million less in music royalties during the first year of these updated bundled Premium plans.

The NMPA letter sharply criticized Spotify's new audiobook-only plan, calling it misleading. According to the letter, the plan is designed to artificially enhance the perceived value of Spotify's bundled Premium plan by offering the same audiobook content and music for just $1 less than the Premium plan.

It remains unclear whether this development will affect Spotify's planned changes to its royalty model. Artists and publishers frequently criticize the streaming industry, including Spotify, for paying insufficient royalties to music creators.

While Spotify faces increased scrutiny from regulators and industry stakeholders, the impact on proposed changes to the royalty model and the broader implications for digital content distribution remain unclear.

Related Article: Spotify Audiobook Consumption Hits 470% Increase After TV Adaptation Release

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