France has created a new tax on music streaming platforms which was announced back on Wednesday. Even though its purpose was to help the music industry, Spotify has been vocal about how it can negatively affect innovation in the sector.
Spotify Disagrees with France
Spotify openly disagrees with the new tax that France imposes on music streaming platforms, and responded by pulling the support for two upcoming music festivals in the country. The company even threatened to take more action if the new tax was upheld.
The company's Managing Director in the France and Benelux regions, Antoine Monin said that 2024's Francofolies de la Rochelle and the Printemps de Bourges festivals will be affected first, and will announce more in the coming year, as reported by Tech Crunch.
Other platforms such as YouTube, Apple, and local player Deezer agree with Spotify, with the latter expressing that the new fee would be a "real blow to innovation," as it will be taking 1.5% to 1.75% on all music streaming platforms.
French President Emmanuel Macron announced the new country tax back on December 13th, and said that the move was "based on a very low rate of levy on the turnover of the streaming platforms." The proceeds will go to the Centre National de la Musique (CNM).
A Spotify spokesperson also said that they take note of the government's decision, which "does not take into account the efforts made by many platforms including Spotify." They added that it would also affect the growth aspects of recorded music in the country.
In the meantime, the music streaming company is already evaluating the follow-up actions in response to what it calls an "inequitable, unjust, and disproportionate measure," as reported by Yahoo News.
Spotify Changes Its Monetization Metrics
The music streaming giant has been trying to fix its monetization system to make sure that artists get the pay they deserve for their music, which is likely why it is strongly against the new tax in France that would take more from the pot for artists.
In late November, Spotify announced that it will no longer pay contributors to the app if their content has less than 1,000 streams. While this can be a blow to new artists who are trying to grow through the platform, it could ultimately help all artists involved.
With the new policy, accounts that merely post "noise" content for the sake of earning will no longer paid, and the money will go to real artists that people want and do listen to, as reported by Engadget. The mentioned "noise" audio is usually those of background noises.
Even though noise recordings do reach the 1,000 plays that are required to earn from the content, the payout has also become smaller. With the change, the company says that it can save about $1 billion, which will be redistributed to artists who deserve them.
As good as the policy's intentions are, Spotify still looks like the bad guy in the scenario, especially since not all artists can get 1,000 streams right away when they're new. The company also has a reputation for underpaying content contributors.
