France to present ‘streaming tax’ for music industry in 2024

9 months ago 31

The French Ministry of Culture announced on Wednesday (13 December) that streaming platforms’ earnings will be taxed to promote the French music industry, prompting outrage from Spotify and Deezer.

This new tax will directly finance the National Center for Music (CNM), founded in 2020. It follows the example of the National Centre of Cinematography (CNC), which has collected a tax on movie theatre ticket prices since 1993 to promote the French audiovisual industry.

“Following a government decision, the 2024 budget bill will confirm the creation of a contribution from streaming platforms,” the Ministry of Culture told AFP.

The tax specifications and its expected revenue have not yet been disclosed.

In April, the then-senator Julien Bargeton of Macron’s Renaissance party presented a report to the Culture Minister Rima Abdul Malak suggesting a 1.75% tax on streaming platforms’ earnings, whose “expected annual yield is around €20 million”.

Pushback

“This tax is unfair as it only applies to streaming sales and not physical sales or music radio,” Spotify’s French managing director Antoine Monin told FranceInfo on Thursday.

According to him, the French government’s tax will impede the competitiveness of European actors such as Swedish Spotify and French Deezer against US Big Tech, notably YouTube Music, Apple Music or Amazon Music.

“Spotify generated profits for the first time in the last quarter [€65 million], but at the moment, we are in a fragile financial balance,” he continued.

Spotify’s CEO, Daniel Ek, announced earlier this month the company will reduce its global headcount by “17% across the company”, or a total of 1,500 layoffs.

Voluntary contribution vs tax

On Wednesday, Apple, Deezer, Meta, Spotify, TikTok and YouTube advertised that they found a common agreement to contribute voluntarily to the operations of the National Center for Music, with an expected payout of “more than €14 million in 2025”.

In an opinion paper published in Le Monde on 6 December, Pascal Nègre, President of the music label 6&7 argued for a tax, considering that an industry’s voluntary contribution would empower private actors to influence French music policies and impede “French diversity”, while a tax will support the French’s ambitions for its music industry.

In November, the French Senate voted in favour of a streaming-tiered tax within a larger budgetary law package. Following the Senators’ proposal, only those with the largest turnover (more than €400 million) would pay a 1.75% tax.

The vote was welcomed by several associations, calling a tax “more secure than the voluntary contribution mechanism”.

According to Deezer and Spotify, this decision would create a “new production tax”.

Apple did not answer Euractiv’s request for comment at the time of publication.

[Edited by Luca Bertuzzi/Nathalie Weatherald]