Spotify vows French users will soon face the EU’s highest streaming prices. This move is a response to France’s new streaming tax, impacting competitors like Deezer, Apple Music, and YouTube Music. The levy aims to support emerging musicians and the French music industry.
Currently, Spotify stands alone among top streaming services in announcing a price increase. However, the extent of this hike remains undisclosed. Given Spotify’s recent communications, a substantial increase seems probable. The new 1.2% levy, approximately 13 cents on Spotify’s €11.99 per month fee, is deemed by Spotify as unmanageable.
In response, Spotify has ceased funding French music festivals and reduced support for artist marketing initiatives in the country. The levy is expected to generate around €15 million / $16 million annually from all platforms, with Spotify, as the market leader, bearing the highest burden.
Streamers vs France: Battle Begins
Is it all about money? The levy is a fraction of what Spotify’s podcasting division pays, contributing to its losses despite growing subscribers and revenues. CEO Daniel Ek’s profits from selling Spotify shares dwarf the levy.
Expected revenue of €15 million slightly exceeds the €14 million annual voluntary contribution all streamers except Amazon offered. Yet, voluntary contributions can cease at any time.
If Spotify raises prices beyond the levy, it might spark consumer discontent, prompting other streamers to follow suit. Deezer’s CEO criticized the levy, hinting at passing on extra costs.
While a small price hike might not incite a revolution, raising prices substantially without alienating consumers could set a precedent for global markets.
