The French Ministry of Culture has actually revealed a tax on the profits made by music streaming platforms to promote the development of the French music market.
The brand-new streaming tax will fund the National Center for Music (CNM). This brand-new tax has not come without criticism from leading streaming platforms: Deezer and Spotify.
France Streaming Tax Faces Criticism
It is not the very first time France has actually revealed tax procedures for the show business to money federal government departments. The National Centre of Cinematography (CNC) has actually taxed theater ticket costs given that 1993 to promote the audio-visual market.
The precise nature of the tax on the streaming platforms has actually not been revealed, nor has the specific earnings it will raise. The tax belongs to the 2024 spending plan expense.
It was very first recommended previously this year when Senator Julien Bargeton of the Renaissance Party provided a report proposing a 1.75% tax on the revenues made by streaming platforms. The proposition mentioned that the tax uses to the streaming platforms with an anticipated yearly yield of around EUR20 million.
The tax is currently bring in criticism from market gamers. While talking to FranceInfothe French handling director for Spotify, Antoine Monin, believed that the tax was unjust due to the fact that it just used to streaming sales, not physical sales or the ones made on radio.
He even more believed that the taxes enforced by the French federal government would hinder the competitiveness of leading European streaming platforms like Spotify and Deezer versus their United States competitors such as Amazon Music and Apple Music.
The tax comes as Spotify deals with some monetary obstacles. Previously this month, Spotify’s CEO, Daniel Ek, kept in mind that the streaming platform would cut its international headcount by 17% throughout the business, amounting to around 1,500 layoffs. This tax will include another damage to the earnings.
Streaming Tax Will Hurt Tech Sovereignty in Europe
Deezer’s CEO, Jeronimo Folgueira, likewise revealed that this tax would impact the “tech sovereignty in Europe. While talking to Brussels Signal, Folgueira stated he was dissatisfied with the intro of this tax.
France’s choice to enforce a music-streaming tax on digital platforms will harm the “tech sovereignty” of all of Europe, a French media giant Deezer’s CEO @jfolgueira informs Brussels Signal. https://t.co/6T2NBisoaO
— Brussels Signal (@brusselssignal) December 15, 2023
“We are a French tech business promoting more regional music than any other platform,” Folgueira stated.
We will now be required to take procedures to secure business and will have less cash to invest in supporting French artists and making certain music intake in France grows.
Folgueira includes that this brand-new tax will benefit United States Big Tech companies in taking in expenses. Executing this tax would likely backfire in France and Europe.
The flat rate troubled all music streaming business likewise makes it clear that this tax will have an even worse result on the independent European music-streaming platforms.
Tech Giants Collaborate On a Compromise
As the federal government is enforcing this tax to support the National Center for Music, numerous tech giants have actually collaborated to make a voluntary contribution to supporting the operations of NCM. This cooperation will have a predicted payment of over EUR14 million in 2025.
The tech giants likewise stated they would support NCM in more market advancements. The voluntary contribution is anticipated to provide more worth than the Senate’s tax on streaming platforms. It will likewise produce equality in the market.