Looks like Spotify is going back to basics.
Spotify has introduced a new Basic subscription plan in the United States, giving users a cheaper option without audiobook access.
However, the move isn’t without controversy.
The new plan comes just weeks after the streaming giant’s second price hike in less than a year. And, it goes right in the middle of growing industry concerns about the platform’s royalty payments.
What Is the Spotify Basic Plan?
Compared to the $11.99 Spotify Premium Plan, the new Basic plan is priced at $1 lower ($10.99 per month) for individual subscribers.
Subscribers get the main Premium features like ad-free listening, offline downloads, and unlimited skips. The big difference? No access to the 15 hours of audiobook listening that comes with Premium plan.
To make the long story short, this is essentially a return to its roots – a music-only streaming service without audiobooks.
Aside from this, Spotify has also quietly introduced a Basic Family plan priced at $16.99 per month, which is $3 less than the Premium Family option. The company may also offer a Basic Duo plan for $14.99.
On the flip side, Spotify has a separate Audiobooks Access plan for $9.99 per month for those who want audiobooks. This includes 15 hours of audiobook-listening time but limits music streaming to the free, ad-supported version.
How to Switch to Spotify’s Basic Plan
Unfortunately, transitioning to Spotify’s Basic isn’t as straightforward as one might hope.
For one, the option isn’t directly accessible on the site, yet. Instead, it’s hidden in account settings. And, it’s only available to existing Premium subscribers who want to downgrade. New users can’t sign up for it directly.
To switch, current subscribers need to go to their account management screen by clicking on their Spotify Profile. From there, click on “Manage Subscription” and look for the option to downgrade to Basic.
Sounds simple, right? Well, it’s not so easy for Family and Duo subscribers.
For one, users can’t switch from Premium Duo to Basic Duo, and then to a Basic Family plan. Each change requires going back to the matching Premium plan first.
This also applies if you want to cancel the Basic subscription. You’ll need to resubscribe to Premium before you can cancel your plan.
iOS users face extra challenges due to App Store rules. They must use a desktop or mobile browser to make the switch, as the option isn’t available in the iOS app. Android users, however, can see the Basic option when logged into their account on desktop or mobile.
Plus, Spotify gift cards are only applicable to Premium subscriptions.
Why the Industry Is Worried About the New Plan
While people looking to save money might like a cheaper option, the music industry isn’t happy about Spotify’s Basic plan.
The concern centers on how Spotify categorizes its subscriptions and how this affects royalty payments.
Spotify has relabeled its Premium subscriptions as “bundles” because they include audiobooks. This lets the company pay lower royalty rates to artists and publishers under the Copyright Royalty Board (CRB) agreement.
While the Basic Plan should pay artists the same rates as before, all Premium subscribers automatically got upgraded to the bundled plan. And, Spotify seemingly does not promote the Basic Plan as much as the Premium plan, especially because of the many hoops users have to go through to access it.
This led to worries that Spotify may be gaming the system and utilizing loopholes to pay artists less.
The National Music Publishers’ Association (NMPA), for example, has described Spotify’s actions as a “war on songwriters.”
The dispute has even led to legal action.
The Mechanical Licensing Collective (MLC) is suing Spotify for allegedly underpaying royalties. Based on this, the industry thinks this bundling strategy could reduce royalty payments by over $160 million each year.
On the other hand, Spotify defends its approach as industry standard, comparing its bundling practices to those of competitors like Amazon’s Audible.
The company claims it “is on track to pay publishers and societies more in 2024 than in 2023” overall, despite the reclassification.