Politician in France calls for new tax on music streaming services

Photo: Alexander Sinn via Unsplash

A senator in France has called on the Minister of Culture Rima Abdul Malak to start taxing music streaming platforms that are operating in the country in an effort to preserve cultural content and support the country’s music industry.

The proposal, presented by French Senator Julien Bargeton, calls for a 1.75% tax rate to be levied on the revenue of music streaming apps like Spotify, Deezer, Apple Music and YouTube Music.

As first reported by Music Ally, the tax would apply to both paid and free memberships and would generate an estimated €20 million (approx. USD $22 million) per year. In addition, the proposal would also generate €5 million from the lowering of drawing rights.

Senator Bargeton’s proposal aims to create a sustainable funding source for France’s cultural content and music industry, which has been impacted by the rise of music streaming services.

“This contribution would target paid streaming services by subscription as well as free streaming services financed by advertising, on the model of the TSV5, at a rate low enough not to structurally modify the economic balances between players or have an impact on the consumer,” according to a translation of the proposal sent by Senator Bargeton to France’s culture minister.

Bargeton argued that the economic state of the music sector has transformed from that of the 2010s. While the success of paid and free streaming services helped overcome the “disc crisis,” which began in the mid-2000s, streaming has disrupted France’s cultural music.

The proposal marks the culmination of Bargeton’s work on financing the music sector, which was entrusted to him by French Prime Minister Élisabeth Borne in October 2022.

The report aims to revive the National Center for Music (CNM), which was established in 2020 to preserve cultural music and artists without replacing all players in the music industry.

Bargeton says in the report that the tax on music streaming services is an extension of the levy imposed on all musical activities like the live music industry, rather than a new tax.

However, the senator noted that France’s streaming market is lagging compared to other Western countries like the US and the UK and Scandinavian countries. Citing data from the IFPI, Bargeton said revenue from recorded music in France has been growing steadily since 2015 for a total of €920 million in 2022, up 6.4% from 2021.

Trade body SNEP, which represents 93 record companies and labels in France, last month said France is struggling to reach the paid subscription levels of other major music markets.

“Regardless of age group, subscription-based streaming is struggling to reach the levels of the other major music markets in France,” SNEP said, adding that “platforms and [labels] alike have a major challenge on their hands: to convince consumers, young and old, to make the change to subscription-based services.”

SNEP’s Managing Director, Alexandre Lasch, recently suggested that TikTok’s “massive use diverts consumers from subscription-based services, the drivers of today’s music business model.” (SNEP also noted in a report that TikTok and short-form videos “have re-shuffled the deck in relation to music streaming”.)

France, previously the world’s fifth-largest recorded music market is now sixth, losing its ranking to China, according to recent data from the IFPI.

Bargeton likened the proposed tax on streaming to the taxes imposed on the distribution of audiovisual content via physical and online means.

The senator said the proposed tax of 1.75% is “low enough not to upset the platform economy or burden the income of rights holders,” while ensuring that the CNM has sufficient income to promote its cause to maintain the strength of the French musical sector.

However, the proposal was met with opposition from SNEP, which said the report “fuels the fractures within the music industry and brings new avenues of dissension.”

“Not only does it fail to document the supposed needs of the National Music Center, but it bases its recommendations on an erroneous analysis of the current dynamics of streaming and its actors,” SNEP said.

SNEP noted that recorded music already contributes €170 million more to the State budget than performing arts at the height of its contributory capacity.

Recorded music will also receive 10 times less aid from the government this year, the trade body added.

“Going in the direction of the report would mean the failure of public policy support for our national and European champions at a time when they face competition from new entrants like TikTok, which keep their audiences captive. without paying the creators,” said SNEP Chief Executive Alexandre Lasch.

“There are alternatives to finance the CNM, supported by artists, authors, composers, publishers and producers but brushed aside by the senator. Other avenues that have been debated over the past few months have even been ignored. The state is not obliged to choose an unjust and dangerous policy,” Lasch continued.

 Music Business Worldwide

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