Spotify is escalating its disapproval over a new tax in France that imposes a levy on all music streaming services in the country including Apple Music. The Swedish firm will no longer sponsor two music festivals in France and has threatened more action to follow soon (via TechCrunch).
Spotify alongside others is decrying a new tax introduced in France last week aimed at music streaming services, one that would see those platforms forced to pay 1.2% of their revenue if it exceeds $22 million. The French government states that the collected tax will be used to fund and support local musicians via the Centre National de la Musique. Other streaming services like Deezer, Apple Music, and YouTube Music have also criticized the new tax set to go into effect in January.
As a form of protest, Spotify officially announced that it was pulling all forms of support from two music festivals in France – Francofolies de la Rochelle and Printemps de Bourges. The company’s managing director for France and the Benelux Antoine Monin also stated that Spotify will enact more protesting actions throughout the country next year, although the nature of those actions is so far unclear.
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Monin also had scathing remarks against the French government in an interview quoted by TechCrunch. While he acknowledges that Spotify will be able to absorb the music tax, he accused the government of fostering an environment that doesn’t “encourage innovation and investment,” adding that “France will no longer be a priority for Spotify.”
Leading music publication Billboard also chimed in on the situation, claiming that Spotify is considering subscription price hikes to make up for the tax. A Premium Individual subscription currently costs €10.99 per month, which was recently raised from €9.99 in July.
Adding to its financial woes, Spotify has gone through three rounds of job cuts this year alone, the last of which was announced earlier this month. Despite the layoffs, Spotify remains optimistic about its long-term prospects. The company continues to hold a dominant position in the music-streaming market, boasting over 422 million monthly active users.
While Apple Music will also be affected by the tax, it’s unclear at this point what measures Apple is going to take, if any. The company recently raised prices for some of its services, but that increase did not include Apple Music. The company also introduced new measures to combat streaming fraud on its service, a move that could marginally improve its revenue.
