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Spotify starts the process of reducing its investments in France as a direct reaction to the implementation of a new tax on music-streaming services.

Spotify is withdrawing its sponsorship for two music festivals as a means of protest against a contentious new tax specifically targeting music-streaming companies in France. The company has also warned that other measures will be taken in the next few months.

Antoine Monin, the director in charge of Spotify operations in France and Benelux, recently expressed strong opposition to a newly proposed tax. This tax aims to impose a fee, estimated to be between 1.5% and 1.75%, on all music-streaming platforms. The collected funds will be allocated to the Centre National de la Musique (CNM), an organization established in 2020 to provide financial support to the French music industry.

Although Apple, Google’s YouTube, and local player Deezer have all expressed their objections to the new rule, Spotify has been the most outspoken among all the big music-streaming companies. Following the recent statement, Spotify said that the decision was a significant setback to the development of new ideas and is now assessing its next actions.

The corporation has announced its intention to withdraw its sponsorship for the Francofolies de la Rochelle and the Printemps de Bourges festivals, which it has been providing financial and logistical assistance to. This decision will take effect in 2024. Monin said that there would be other announcements in 2024, without providing any details on the nature of such activities.

Face-to-face conversations
Spotify was engaged in a dispute with the Uruguayan government over a new law that guarantees “fair and equitable” payment for all musicians participating in a recording. Spotify said that the legislation would necessitate double payments to rightsholders for identical recordings, leading to its cessation of operations in the nation. The corporation then reversed its position after the government provided guarantees that music-streaming services would not be required to bear any additional expenses arising from the bill.

France is distinct in the sense that it is probably a far larger market for Spotify, and withdrawing from it is not a feasible option. As Monin said last week, the company’s strategy is expected to focus on reallocating resources to other areas.

“Spotify will be able to handle this tax financially, but they will reduce their investments in France and instead focus on other markets,” Monin said in an interview with FranceInfo last week. “France lacks a supportive environment for fostering innovation and attracting investment.”

Eltrys Team
Author: Eltrys Team

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