Swedish streaming giant, SPOTIFY, announced its decision to raise prices in France, due to a newly imposed tax that is believed will not achieve its intended objectives of music creation.
Although French government’s move to levy a 1.2% tax on streaming companies’ revenue aims to support music creation, effective from this year onward.
“While Spotify worked very hard to encourage the government to avoid adding this tax, unfortunately they decided to move forward.” Spotify stated, as it has proceeded with decision to adjust its pricing strategy in response.
While expressing disappointment with the new tax, Spotify expressed its concern that; “To put it bluntly, all French users will see their subscription plan fee go up. French users will now pay the highest subscriptions across the European Union.”
Spotify chipped it intends to disclose the magnitude of the price adjustment at a later date, also indicating the impact on users’ subscription fees.
In their statement addressing the tax, Spotify further criticized the measure as misguided, asserting that it would not foster music creation as intended. Instead, the company argued that the tax would only burden listeners financially and introduce an additional intermediary in the form of France’s National Music Centre (CNM).
Spotify analyzed the CNM is expected to benefit from the tax revenue, with the government allocating funds to support various aspects of the music industry, including aiding emerging artists and facilitating the international breakthrough of French musicians.
The head of the CNM, Jean-Philippe Thiellay, snubbed Spotify’s objections; the tax “will not finance the CNM, whose operations are ensured by the state, but it will finance creation and diversity,” he said in an interview last year. He instead, assured that the entirety of the tax revenue would be reinvested into the music sector, “100% of this tax will be re-injected into the sector.” he said.