As the French government moves forward with a much-debated “streaming tax” on music platforms, a price increase is “definitely on the table” for Spotify.
A source with direct knowledge of the situation has now reaffirmed to DMN the distinct possibility of a cost bump in France. For background, the charge at hand – encompassing 1.2 percent of music services’ ad-supported and subscription revenue, per local reports – is meant to fund the European nation’s almost four-year-old National Music Center.
Spotify and others had pushed for both a voluntary-contribution system as well as a model wherein the tax would be spread out among radio stations, physical sales, and more. But with the efforts having failed to bring about the desired result, Antoine Monin, Spotify’s MD for France and Benelux, made clear earlier in December that his company may well pass on the new charge to subscribers.
Now, the initially mentioned source has elaborated to DMN that a price increase could come to fruition to offset not only the new tax, but different factors like inflation. While it’s unclear exactly what the heightened price will look like and when it will roll out, Spotify’s individual plan still costs €10.99 per month at the moment in France, where Paris-based Deezer has boosted its own price to €11.99 per month.
Though it appears exceedingly unlikely that Spotify will threaten a full-scale withdrawal from the French market like it did in Uruguay, the company has already taken steps to “disinvest” in multiple areas domestically.
As we first reported last week, Spotify is no longer a sponsor of French music festivals Printemps de Bourges and Francofolies de La Rochelle, the former of which is scheduled to take place in April. Upon disclosing the cessation of support for the annual happenings, Spotify also signaled that it would make “other announcements” in 2024.
Of course, time will tell whether these and related maneuvers can bring about the end of France’s streaming tax – or at least keep the involved percentage, which some government officials had first recommended be closer to two percent, from rising.
Bearing in mind the extremely remote chance of Spotify’s pulling out of France altogether to protest the tax, it’s worth reiterating in conclusion that the platform ultimately opted to remain in the aforesaid Uruguay.
In brief, after setting a hard pullout deadline in response to copyright law changes, Spotify decided to stay put in the South American country following the issuance of a government decree shifting the retooled law’s remuneration obligations. As implementation negotiations take shape in the new year, it’ll be interesting to see how this far-reaching decree impacts the law and key stakeholders.