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If your January 2025 publishing statement showed a 30–40% drop in mechanical royalties despite consistent streaming numbers, you’re not alone.
The decline stems from a change in how Spotify reports and pays mechanical royalties on bundled subscription plans.
Spotify’s bundled offerings — such as Spotify + Hulu, Spotify Premium + Uber One, and other partner packages — are classified differently under U.S. law.
• Standard music-only plans are subject to a 10.5% mechanical royalty rate.
• Bundled or “mixed-use” plans are classified as non-music primary services, which lowers the payable rate to 2–3%.
This reclassification caused a documented 38% average drop in U.S. mechanical royalty payouts for Q1 2025, according to data from the Mechanical Licensing Collective (MLC).
• Limited Transparency: Spotify does not disclose bundle penetration rates at the track level, leaving creators unable to reconcile expected versus paid royalties.
• Delayed Reporting: The 6–9 month lag between usage and payment means many rights-holders only discovered the change in early 2025.
• International Complications: More than 75% of UK-based artists’ Spotify royalties derive from international plays, where exchange rates and sub-licensing add further variance.
1. Audit Streaming Statements: Review MLC and distributor reports for Q1–Q2 2025 to identify mechanical discrepancies tied to bundled usage.
2. Separate Bundle Data: Where possible, request metadata or statement breakdowns from Spotify or your distributor.
3. Register Every Work Correctly: Ensure your songs are properly filed with the MLC, ASCAP, BMI, or SESAC to avoid compounding losses from unmatched data.
4. Engage Professional Review: Studio Budgets conducts comprehensive royalty audits that isolate underreported or misclassified mechanicals stemming from platform model changes.
Spotify’s bundled subscription accounting is legally compliant but structurally disadvantageous for independent creators. The reduction from 10.5% to 2–3% mechanical rates significantly affects songwriter income — particularly for those without publishing administration support.
If your January 2025 statements show a mechanical shortfall, now is the time to review, reconcile, and recover.
Studio Budgets helps artists, songwriters, and publishers uncover underpayments and document recoverable claims across global streaming platforms.
Streaming Subscription Price Increases and Music Royalties The economics of music streaming are undergoing a subtle but profound shift that has artists and labels recalibrating their expectations for royalty revenue. In late 2025, reports indicate that Spotify is...