Songwriters ask copyright judges to kill the Spotify bundle that cut their streaming pay nearly in half

The crime was the plumbing

In April 2023, Michael Smith's bot accounts played his AI-generated catalog 80.9 million times on YouTube Music family plans; Taylor Swift's whole catalog drew 9.3 million that month, a comparison prosecutors filed in court↗. ¹ On October 6, Judge John G. Koeltl sent Smith to prison for 18 months and ordered him to forfeit $8,091,843.64, in what both sides call the first criminal prosecution of its kind in the US. ¹²³

Services pay songwriters from a pool divided by each track's share of plays, and Smith's bots only had to join it. The Music Fights Fraud Alliance told the court every fraudulent stream "diluted the value of every legitimate stream occurring during the same accounting period." ¹

The rate fight assumes a clean pool

A day earlier, on October 5, the Copyright Royalty Board's Phonorecords V opened↗, with direct cases that will set the US mechanical rate for streaming from 2028 to 2032. ⁴ The priority fight is Spotify's▲+0.49% — Spotify, up 0.49 percent today bundle: after audiobooks went into Premium plans in spring 2024, mechanical payments on premium streams fell by nearly half, and the NMPA counts $500 million missed by songwriters and publishers since bundling began at Spotify and Amazon▲+3.31% — Amazon, up 3.31 percent today. ⁴ No settlement is expected this time. ⁴

The week's receipts on the leak

Sony▲+0.50% — Sony, up 0.50 percent today Music disclosed more than 260,000 takedown requests against AI deepfakes↗ of its artists by end-September, nearly double the 135,000 sought by end-March, a pace above 20,000 requests a month across Q2 and Q3. ⁵ Enforcement, Sony says, is "becoming an uphill struggle." ⁵⁶

Deezer, which tags AI-made tracks, says fully AI uploads passed half its daily intake in June, about 90,000 a day, and that up to 85% of the streams they drew in 2025 were fraudulent. ⁷⁸

Washington puts dilution in print

On October 7, the US Copyright Office opened a public inquiry↗ that names "the dilution of the royalty revenue pool" as the primary harm of streaming fraud, in a docket counting $9.5 billion in US streaming revenue for recordings. ⁷¹⁰ Written comments are due November 23. ³⁷

Terrecon, a Kyiv intelligence NGO, priced the far edge: 981 suspected AI Russian war-propaganda tracks, built with tools like SunoPVT~$2.45B — Suno, private, latest valuation ~$2.45B and Udio, drew almost 87 million plays across the 608 that publish counters, at commissions of $11 to $330 and as little as two hours' work. ⁹

The other side of the ledger

Spotify holds that it used bundle terms every party signed in the last settlement ⁴, that "all music is treated equally, regardless of the tools used to make it," and that its defenses held Smith's take on its platform to about $60,000. ¹ Deezer's own data softens the alarm: fully AI tracks draw 1 to 3% of its listening. ⁸ Dilution does not need a majority, only a margin, and the Copyright Office has now said so in print. ⁷

Where the money moves

For Spotify (NYSE: SPOT), a killed bundle and a raised headline rate land on the cost base just as a federal docket puts its royalty accounting in print. ⁴ Sony Group (NYSE: SONY) funds the takedown treadmill ⁵; Deezer (Euronext: DEEZR) already culls and labels. ⁷⁸

The dated catalysts: Copyright Office comments due November 23 ³⁷, a CRB trial in the first half of 2027 ⁴, and rates that govern 2028 through 2032 ⁴. The rate the judges set is only worth the pool it is levied on, and this pool leaks from both ends: bundles shrink it before the split, bots drink from it after.