Spotify has called a new tax on music streaming services in France a “monumental strategic error” and an "inequitable, unjust and disproportionate measure". It also argues that the digital music companies had already proposed a better voluntary funding system to help support the country's Centre National De La Musique.
French President Emmanuel Macron confirmed yesterday that the country will introduce a new tax on music streaming services next year. It will be charged on each service's turnover and is expected to be in the region of 1.5-1.75%.
The tax was first proposed earlier this year as a way to boost the funding of the Centre National De La Musique, which was set up in 2020 to support stakeholders across the French music community. It is currently funded via a 3.5% levy charged on tickets for large-scale live shows, with additional support from the music industry's collecting societies.
The music streaming companies were united in opposing the proposed tax, with Apple, Deezer, Meta, YouTube and TikTok joining with Spotify in supporting a voluntary funding initiative instead. They said in a statement that they'd agreed a scheme that would raise over €14 million in 2025.
However, France's Senate approved the streaming tax proposal last month ahead of Macron's statement yesterday.
Spotify France’s Director General Antoine Monin has argued that European streaming companies Spotify and Deezer will be hit harder by the tax than their US-based competitors like Apple, Amazon and YouTube. In part, this is because they dominate in the French streaming market, but also because music streaming is their core business, whereas for the tech giants it is something of a sideline.
Speaking on French rolling news channel France Info, Monin went on to say that the tax - which he calls a “monumental strategic error” - means that Spotify will “disinvest from France”.
Deezer previously indicated that it might have to fund any tax payments by further increasing subscription fees. Though, supporters of the tax within the music community would probably be OK with that, given the prevalent view that music streaming subscription prices are still too low.
Following Macron's statement, a Spotify spokesperson told AFP: “We take note of the government's decision, which does not take into account the efforts made by many platforms including Spotify".
“This is a real blow to innovation and to the growth prospects of recorded music in France", they added. "We are evaluating the follow-up to be given to the implementation of this inequitable, unjust and disproportionate measure".