Spotify and BMG (Bertelsmann Music Group) have formalized a direct, multi-year US publishing licensing agreement, marking the latest seismic shift in how streaming platforms compensate songwriters. The deal, announced in early October 2025, is strategically designed to bypass the limitations of the US market’s traditional Copyright Royalty Board (CRB) model and deliver greater overall value to BMG’s roster of songwriters.
This new framework is a direct response to the “bundling loophole” controversy that emerged after Spotify began offering audiobooks, which reduced mechanical royalty rates paid via the Mechanical Licensing Collective (MLC). The Spotify BMG Direct Publishing agreement ensures songwriters benefit from both the statutory MLC payments and the new direct licensing revenue, resulting in a higher total payout that effectively neutralizes the bundling discount.
For BMG, this move reinforces the music company’s decision to assume direct control over its digital business, allowing it greater leverage in platform relationships. BMG CEO Thomas Coesfeld stated the deal reflects a “progressive licensing model” and applauded Spotify’s momentum, specifically acknowledging their shared commitment to developing new protections against AI misuse in the music ecosystem.
The successful negotiation of the Spotify BMG Direct Publishing deal follows similar landmark agreements with major publishers like Universal, Warner, and Sony. By forging these direct relationships, Spotify is setting a powerful precedent for a more flexible, transparent, and songwriter-centric licensing model, crucial for the long-term health of the digital music industry.
