Spotify logo. Image by Lionel Bonaventure/AFP via Getty Images.
Spotify plans to pull out of Uruguay following newly enacted copyright legislation in the country, Billboard and Music Business Worldwide report. According to Billboard, the new law calls for “equitable remuneration” for artists but does not make it clear whose revenue shares the money would come from.
“Without clarity on the changes to music copyright laws included in the 2023 Rendición de Cuentas law — confirming that any additional costs are the responsibility of rights holders — Spotify will unfortunately begin to phase out its service in Uruguay effective January 1, 2024, and fully cease service by February, to the detriment of artists and fans,” a representative of the streaming giant wrote in a statement.
“It’s not that we are against the platforms… but we want [streaming revenue] to be distributed fairly,” said Gabriela Pintos, a spokesperson for The Uruguayan Society of Performers (SUDEI), told the daily paper El Observador in a recent interview. SUDEI was a driving force behind the Rendición de Cuentas Act.
But Spotify is adamant that the new law will ultimately damage its bottom line to an unsustainable degree. “Spotify already pays nearly 70 percent of every dollar it generates from music to the record labels and publishers that own the rights for music, and represent and pay artists and songwriters,” the company’s statement continues. “Any additional payments would make our business untenable.”
Read Spotify’s full statement below.
Without clarity on the changes to music copyright laws included in the 2023 Rendición de Cuentas law – confirming that any additional costs are the responsibility of rights holders – Spotify will unfortunately begin to phase out its service in Uruguay effective January 1, 2024, and fully cease service by February, to the detriment of artists and fans.
Spotify already pays nearly 70% of every dollar it generates from music to the record labels and publishers that own the rights for music, and represent and pay artists and songwriters.
Any additional payments would make our business untenable. We are proud to be their largest revenue driver, having contributed more than $40B to date. And because of streaming, the music industry in Uruguay has grown 20% in 2022 alone.
We want to continue giving artists the opportunity to connect with listeners, and Uruguayan fans the opportunity to enjoy and be inspired by their music.
Changes that could force Spotify to pay twice for the same music would make our business of connecting artists and fans unsustainable, and regrettably leaves us no choice but to stop being available in Uruguay.”
According to the International Federation of the Phonographic Industry (IFPI), Uruguay was the world’s 53rd largest market for recorded music last year, with streaming revenue comprising 64 percent of its $13.2 million total profits. But the debate over “equitable remuneration” will be watched closely in much larger markets, too — including the United Kingdom, where high-profile artists have been calling for similar legislation.
The FADER has reached out to a representative of Spotify for further comment on the company’s decision to leave Uruguay,