Black angry, Spotify, the giant of streaming musical, has just released the “plogue” on the Francofolies de La Rochelle.
The Francos of Montreal will undoubtedly be the next victim. It’s not that Spotify is short of users (550 million, including 220 million Premium subscribers) nor short of money ($14.6 billion in revenue), but when you’re a giant, you don’t does not allow his behavior to be dictated to him. The French government has just had the bad idea of imposing a 1.2% tax on the revenues that Spotify makes in France. The tax will raise approximately $22 million per year. Awesome for a platform like Spotify.
Here, the Ottawa government also wants to make the digital giants who have driven the audiovisual industry, the music industry and newspapers into bankruptcy pay. This is what the federal government is seeking to do with the new laws on streaming and online news. For the moment, only Google has given up, although the $100 million promised and indexed each year is less than what we hoped for.
At the last minute, our Minister of Finance Chrystia Freeland nevertheless decided to give a little New Year’s Day gift to the poor digital giants. She who had sworn that they would be taxed at 3% on their Canadian income from 1er January finally took pity on them. The tax in question is postponed until the Greek calendars!
Fear of retaliation
Mme Was Freeland afraid of retaliation? No doubt, because it is following the decision of the French government to impose this modest tax of 1.2%, intended to support the National Music Center, that Spotify will no longer sponsor the Francofolies and the Printemps de Bourges , a festival which will celebrate its 47th anniversary next April. But where does all the money Spotify makes go?
Despite exponential growth in its subscribers and despite the layoff of 2,300 employees, Spotify will be in the red by around $150 million again this year. Obviously, its creator Daniel Ek has eyes bigger than his belly. It continues to make acquisitions and launch new products in order to neutralize the competition, but it is unable to reduce its marketing, administrative and research expenses. In the end, it is the performers and composers who suffer.
Monsieur Ek claims to remunerate artists more generously than all other music platforms, but this is false. It pays them about the same as Amazon, less than Deezer and Apple, but much more than YouTube, the meanest giant.
It’s incomprehensible
I tried to understand how the big music platforms pay artists, but I couldn’t. It’s a Kafkaesque complication. Basically, let’s say that out of $10 in revenue, they pay about 50 cents to the performer and $1 in royalties to the composer, but so many variables, all determined by algorithms, come into play that we cannot trust this average.
To save a little, starting next Monday, Spotify artists and composers who do not generate 1,000 plays per year will no longer receive a penny. Casually, the platform will save some $55 million.
Happy New Year anyway, dear artists!