New music-streaming tax prompts Spotify to begin divesting in France

 

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In response to a contentious new tax targeting music-streaming platforms in France, Spotify has decided to withdraw its support for two music festivals and has hinted at further actions in the future.

Antoine Monin, the managing director of Spotify in France and Benelux, expressed his opposition to the new tax on X platform this week. The tax is set to impose a fee ranging from 1.5% to 1.75% on all music-streaming services, with the funds being allocated to the Centre National de la Musique (CNM), an organization established last year to bolster the French music industry.

Spotify, along with other major music-streaming platforms like Apple, Google's YouTube, and Deezer, has strongly opposed a new law. However, Spotify has been the most vocal in expressing its concerns. In response to the law, Spotify has stated that it is a setback for innovation and is currently considering its next steps.

Recently, Spotify has provided some insight into its future actions. According to Monin, a representative from the company, Spotify will withdraw its support for the Francofolies de la Rochelle and the Printemps de Bourges festivals starting from 2024. These festivals have been receiving financial support and other resources from Spotify. Monin also mentioned that there will be further announcements in 2024, but did not provide any details about what those actions might entail.

Spotify recently found itself in a dispute with the Uruguayan government regarding a new law that aimed to ensure fair payment for artists involved in music recordings. The company claimed that this law would require them to pay rightsholders twice for the same tracks, leading them to consider discontinuing their services in the country. However, Spotify changed its stance after receiving assurances from the government that music-streaming platforms would not be burdened with any additional costs resulting from the law.

France stands out from other markets due to its significant size, making it an important market for Spotify. Withdrawing from France is not a feasible option. As Monin suggested recently, the company's strategy is expected to focus on reallocating resources to other markets.

“Spotify will have the means to absorb this tax, but Spotify will disinvest in France and will invest in other markets,” Monin said in an interview with FranceInfo last week. “France does not encourage innovation and investment.”

Credit: TechCrunch

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