Spotify pulls out of two French festivals over tax row

Spotify has pulled out of two music festivals in France after the country changed its tax laws in relation to streaming services.

• READ MORE: Streaming – what happens next? Artists demand “a shift in the way business is done”

The company confirmed that it was withdrawing its support from Francofolies de La Rochelle and Printemps de Bourges as of next year.

Earlier this month (via EuroNews), French President Emmanuel Macron announced that the country was introducing a new tax measure on music streaming services that would be “based on a very low rate of levy on the turnover” of the services.

The country’s Ministry of Culture confirmed the details on December 13, saying that the tax contribution would be “at a rate of 1.2 per cent of [streaming services’] turnover in France”, although platforms with turnover of less than €20 million would be exempt.

In response, Spotify have argued for a voluntary contribution instead of the tax. “This is a real blow to innovation, and to the growth prospects of recorded music in France,” said a representative of the company. “We are evaluating the follow-up to be given to the implementation of this inequitable, unjust and disproportionate measure.”

It is not the first time that Spotify has come into conflict with other nations’ domestic laws in recent months. In November, the company announced that it will no longer provide its services in Uruguay due to the country’s copyright laws that would require “equitable remuneration” for artists.

“Changes that could force Spotify to pay twice for the same music would make our business of connecting artists and fans unsustainable, and regrettably leaves us no choice but to stop being available in Uruguay,” said a Spotify spokesperson at the time.

Spotify has recently made controversial changes to its platform, including a streaming threshold of 1,000 plays before songs are able to generate royalties. According to Spotify data, there are around 100million songs on the service, yet only around 37.5million meet the new requirements to generate revenue.

The change has garnered criticism from the likes of Weird Al Yankovic, who took aim at the platform in his #SpotifyWrapped artist video. “It’s my understanding that I had over 80 million streams on Spotify this year so, if I’m doing the math right, that means I earned $12. Enough to get myself a nice sandwich at a restaurant,” he said.

Earlier this month, the streamer said it will be cutting down 17 per cent of its workforce in order to save costs. That follows a previous decision in January to lay off 6 per cent of staff.

Chief executive Daniel Ek said that the new decision was “difficult” but was made because economic growth had “slowed dramatically”. Spotify employs around 9,000 people, meaning 1,500 jobs were lost in the recent round of layoffs.