The company says that France will now have to pay the most in EU fees.
As a result of a new tax in France that targets music streaming services, Spotify has announced that it will raise membership fees in that country.
This comes almost three months after the company said it would stop spending in France. It started by pulling its support from two festivals, saying that there would be more action this year. Now we have a better idea of what “action” Spotify has been planning.
The tax started on January 1 and will be a 1.2% fee on Spotify and competing services like Deezer, Apple Music, and Google’s YouTube Music. The money will go to the Centre National de la Musique (CNM), which was created four years ago to help the French music industry. All of the companies that will be affected by the new law are against it, but Spotify has been the loudest, mostly because it is the biggest player in the country.
Not Publicized
Spotify hasn’t said how much the prices are going up; all it said was that French users will now have to pay the most for a contract in the whole European Union (EU). The company says it will let subscribers know “over the coming weeks” how much more they’ll have to pay. Part of the plan seems to be to make customers so angry that they put pressure on the people in charge, but the law is already in place, so it’s not likely that anything will change soon.
In A Blog Post Today, The Business Said:
“If this new tax is put in place, Spotify would have to give the French government and music rights holders about two-thirds of every euro it makes from music. Without a doubt, this is a huge amount of money that can’t support a business. We’ve been saying for a long time that we can’t take on any more fees.
A Spotify representative told TechCrunch that the company was only trying to “be honest with our users” about the price increase. They also said that they had “done everything we could” to avoid it but there was no way to do it.
One thing that might say the most about this show is how important France is for Spotify’s market growth. Its answer here is a little different from how it responded to a similar meeting in Uruguay, which is also in the process of passing a new law that promises “fair and equitable” pay for all artists who work on a recording. Spotify threatened to leave Uruguay if the law was passed, saying it would have to pay rightsholders twice for the same songs. The threat worked, and Spotify changed its mind about leaving when the Uruguayan government said music streaming services wouldn’t have to pay any extra costs because of the law.
In France, Spotify is complaining about the new tax just as much, if not more, than it did in Uruguay. However, the company has not said that it will leave France. Even though, like Uruguay, it says it’s really paying artists twice (“equivalent to a double payment,” as Spotify puts it), it would rather raise its prices than say anything about leaving the country.
Also Read: Spotify Sends an Update That Will Let Ios Users in the Eu See Price Information
In December, Spotify said it was ending its support for the Francofolies de la Rochelle and the Printemps de Bourges festivals. The company had been giving money and other resources to these events. With the price increase, this may be the last thing Spotify does to fight the tax. “It’s really about offsetting the costs of this tax, and we hope that the upcoming price increase will ensure we get there,” Spotify told TechCrunch in an email.
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