Spotify promises that its French users will soon pay the highest streaming costs in the EU as part of its fight against the new French streaming levy, which will also affect rivals such as Deezer, Apple Music, and YouTube Music. The fee, which went into force in January, is intended to benefit emerging performers and the French music industry as a whole.
So far, Spotify is the only one of the best music streaming services to promise a price increase, and it hasn’t announced how much it will be. However, considering the tone of its communications thus far, it appears quite doubtful that we are discussing a few pennies. According to Spotify’s blog post, the new 1.2% levy—roughly 13 cents Spotify’s monthly fee of ₹1085.69 is “a massive amount” that it “cannot absorb.”
Spotify has already stopped subsidizing French music events and reduced the amount of money it paid to artist marketing campaigns in the nation.
The overall annual revenue from the levy is projected to be in the range of €15 million / $16 million from all streamers combined; as the market leader in France, Spotify would pay more than its competitors.
Streamers vs France: It’s War
If you were feeling cynical, you may ask if it’s all about the money. After all, the charge is a fraction of what Spotify’s loss-making podcasting section pays Joe Rogan and other podcasters, which is one of the reasons the company is losing money despite increasing subscriber numbers and revenue. And it’s a drop in the ocean compared to the money CEO Daniel Ek gained from selling Spotify shares in the last year.
The estimated revenue of €15 million is just slightly greater than the €14 million that all streamers, except Amazon, have agreed to pay as an annual voluntary contribution to the Centre National de la Musique, which the fee will help support. Of course, voluntary contributions can be halted once people no longer want to volunteer.
If, as appears likely, Spotify raises its costs by more than the levy in order to instill distrust in consumers toward the French authorities, other streaming services may follow suit. Deezer’s CEO, Jeronimo Folgueira, described the levy as “the worst possible outcome of all the different scenarios that we could have ended up with,” and as we’ve seen with streaming in other countries, there can be a domino effect. Folgueira has already stated that Deezer may pass on the additional expenses “along the value chain”.
It appears improbable that a minor price increase would result in a cover version of the French Revolution, or that Spotify could raise its pricing sufficiently to arouse outrage against the French government without shooting itself in the foot. Perhaps a longer game is being played here. If prices rise in France and there is no significant subscriber attrition, it is likely that streaming prices will rise in other areas as well.
