Spotify Criticizes France’s ‘Streaming Tax’ As ‘A Monumental Strategic Error,’ Warns of Possible Price Increase

Spotify is pushing back against a ‘streaming tax’ that’s expected to go into effect in France next year. Photo Credit: Henrique Ferreira

Days after revealing that it would continue operating in Uruguay, Spotify has shifted its focus to France’s forthcoming “streaming tax,” which the service believes will prove “a blow to the music sector.” Antoine Monin, Spotify’s managing director for France and Benelux, recently criticized the music-specific tax at length when speaking with France Info. A number of other streaming-platform execs (from YouTube, TikTok, Apple, Deezer, and more) have also aired their grievances with the change, which is expected to go into effect in 2024.

Notwithstanding this timetable, concrete details about said change, proceeds from which will reportedly finance the almost four-year-old National Music Center, are few and far between at present. French-language reports have spelled out that the “exact terms of the tax have not yet been revealed, nor [has] the annual amount that it should bring in.”

Several other pieces emphasized the same point in different words – though the government report, published months back, that spurred the fee is said to have proposed a 1.5% to 1.75% levy on both subscription and advert revenue.

In any event, with the specifics presumably poised to become public sooner rather than later, the French government last week confirmed the tax itself, which Monin promptly lambasted as “a monumental strategic error which goes against the issues of economic, cultural, and European technology,” according to his translated remarks.

“We pay 70% of our revenue to music rightsholders,” proceeded the close to six-year Spotify exec Monin, “you add to that a 20% VAT, a 3% digital-services tax, a 5% video-services tax, and now a streaming tax at 1.75%. How do you expect us to be able to operate in a market like France?”Later in the discussion, Monin appeared to answer his own question, indicating that while no price increase is currently planned for the French market, if compelled to respond to the tax, Spotify would likely opt for “a 10% increase in subscriptions.”

As it stands, Spotify charges €10.99 per month for premium in France, where Paris-based Deezer is pushing aggressively for growth. During Q3, the Access Industries-owned platform reported achieving a 7.3% direct-subscriber increase in the European nation.

Back to the upcoming streaming tax, Monin, echoing comments made amid the initially highlighted episode in Uruguay, further suggested applying the charge not only to streaming services, but to revenue from radio stations, physical sales including vinyl, and more.