Spotify withdraws festival support in France in response to new streaming tax

Spotify has announced its decision to withdraw support for two major music festivals in France, starting from 2024. This move, according to TechCrunch, comes as a direct response to a new tax imposed on music-streaming services in France, which has sparked controversy and opposition from industry players.

The French government has introduced a tax, expected to range between 1.5 and 1.75%, on all music-streaming services. The revenue generated from this levy will support the Centre National de la Musique (CNM), established in 2020 to bolster the French music sector. While major streaming platforms like Apple, Google’s YouTube, and local player Deezer have opposed the law, Spotify has been particularly vocal in its criticism.

Antoine Monin, Spotify’s managing director for France and Benelux, criticized the tax, labeling it a “real blow to innovation.” In response to the tax, Spotify has decided to pull its support for the Francofolies de la Rochelle and the Printemps de Bourges festivals, events it has previously backed financially and through other resources. Monin hinted at further actions in 2024, though specifics were not disclosed.

Spotify’s withdrawal from these festivals signifies a significant shift in its investment and support strategies within the French music industry. This decision could have broader implications for the festivals and the artists involved, potentially affecting their visibility and financial viability.

Broader industry reactions

The new tax has united major streaming platforms in opposition, reflecting broader industry concerns about the impact of such policies on innovation and investment in the music sector. Spotify’s strong stance may influence how other companies respond to similar legislative changes globally.

Spotify’s reaction in France contrasts with its recent dispute with the Uruguayan government over a law promising “fair and equitable” remuneration for artists. Initially threatening to cease operations in Uruguay, Spotify reversed its decision after receiving government assurances regarding the financial implications of the law.

While withdrawing from the French market is not a feasible option for Spotify, given its significance, the company plans to reallocate resources to other markets. Monin’s statement that France does not encourage innovation and investment highlights Spotify’s strategy to focus on regions more conducive to its business model and growth.