“A monumental strategic error, which goes against the challenges of European economic, cultural and technological sovereignty.” The CEO of Spotify France, Antoine Monin, did not mince words this Thursday morning on the FranceInfo set.
The reason? A tax on the turnover of online music listening platforms whose application the Government announced this Wednesday starting in 2024. A “hard blow” for the music sector that affects Spotify, Apple or Deezeres, music giants the music industry.
“Changing situation
This “new production tax” was brandished on June 21, during the music festival, by the President of the Republic, Emmanuel Macron. Profits from the tax will be donated to the National Music Center (CNM) to support the French music industry.
The CEO of Spotify France, firmly opposed to this tax, regrets that the government has “given in to pressure from the performing arts lobby and some parliamentarians.” A pressure that explains “a change of course” in the situation, while Antoine Monin had had “branch agreements” with the Ministry of Culture on the subject.
“How do you want us to operate in France?”
The tax, which amounts to 1.75% of turnover and is intended to affect payment platforms (such as Apple Music, Deezer, Spotify) and free broadcasters (Youtube, Facebook, Amazon), should indirectly “participate in the game” from GAFA (the Web giants: Google, Amazon, Facebook, Apple), since Spotify is an “independent company” that “struggles to be profitable.”
“Unlike GAFA, we only make music. They have the means to absorb this tax, not us. Spotify is not yet profitable. For the first time, the company made a profit in the third quarter, but we remain in a fragile financial balance” , confesses Antoine Monin on the set of FranceInfo.
Spotify “will divest from France”
Asked about Spotify’s ability to absorb this tax, Antoine Monin is confident that the Swedish company will “disinvest from France” to invest in other more profitable and advanced markets, such as the United Kingdom or Germany. “France will no longer be a priority for Spotify”, he summarizes.
“This tax is unfair since it only affects streaming sales and not physical sales or music radio,” he explains. The desire to finance the CNM is understandable according to the CEO of Spotify France, but “the entire sector must contribute” to this financing.
Spotify, a global leader in audio platforms, recently announced that it would lay off 17% of its employees to “finally become profitable” (around 1,500 positions). It would have to face this new tax, the terms of which have not yet been announced by the Ministry of Culture.
Source: BFM TV
