Spotify has opted out of backing two music festivals and pledged additional measures in the coming months, citing its disagreement with a controversial new tax targeting music-streaming services in France.
The newly established Center National de la Musique (CNM), aimed at bolstering the French music sector, is set to benefit from the revenues generated by a fresh tax. This levy is anticipated to range from 1.5 to 1.75% and will be applied across all music-streaming platforms. Managing director of Spotify in the France and Benelux regions, Antoine Monin, took to X this week to criticize the proposed legislation.
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Spotify has been the most vocal among the leading music-streaming companies that have united against the new regulation. These companies include Apple, Google’s YouTube, local player Deezer, and others. Following the news last week, Spotify declared that the action was a “real blow to innovation” and that it was considering its options.
With the announcement that it will stop supporting the Francofolies de la Rochelle and the Printemps de Bourges festivals, which it has been supporting financially and with other on-the-ground resources, starting in 2024, the business has now provided the first hint as to what such actions will entail. “More announcements will follow in 2024,” Monin continued, without going into any detail on those steps.
Face-to-face
Recall that Spotify and the Uruguayan government recently got into a heated argument over a new law that calls for “fair and equitable” compensation for all musicians participating in a recording. According to Spotify, the regulation would force it to pay rights holders twice for the same songs, forcing it to stop doing business nationwide. Later, once the government promised that music-streaming platforms wouldn’t be held responsible for any additional expenses brought on by the law, the corporation made a complete about-face.
France is unique because it is a far larger market for Spotify, and leaving is not a practical option. Furthermore, as Monin alluded to last week, its strategy is likely more on shifting resources to other markets.
In an interview with FranceInfo last week, Monin stated, “Spotify will have the means to absorb this tax, but Spotify will disinvest in France and invest in other markets.” “Investment and innovation are not encouraged in France.”
Spotify’s choice to scale down its involvement or decrease investments in France, prompted by implementing a fresh tax on music streaming services, reflects a calculated reaction to the tax’s financial repercussions. This action could indicate possible obstacles or uncertainties regarding the sustainability of business activities within the country amid the new tax framework. It highlights the influence of regulatory shifts on multinational corporations and their choices to invest in particular regions or markets.
(Information Source: Techcrunch.com)
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