Music: the Elysée wants to tax the streaming giants

Music: the Elysée wants to tax the streaming giants

The 2023 edition of the music festival will leave a bitter taste in music streaming platforms. Published while the festivities were in full swing, a press release from the Elysée…

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The 2023 edition of the music festival will leave a bitter taste in music streaming platforms. Published while the festivities were in full swing, a press release from the Elysée gave credence to the hypothesis of the imminent adoption of a “streaming tax”, aimed at these actors to contribute to the financing of the National Music Center (CNM). “What I asked for is, by the end of September, to sign a space agreement, so that all the platforms, which sometimes make a lot of money with streaming, help us to redistribute it in the most intelligent way to finance creation and artists, as we have done in France with cinema and audiovisual creation, ”said Emmanuel Macron during the Fête de la Musique.

Created in January 2020 and so far mainly supported by the State and a tax on the ticketing of shows, the CNM suffers from a lack of 30 to 40 million euros to balance its budget and carry out its missions, including the support innovation and the export of French music. According to the press release from the Elysée, the President of the Republic has asked the Minister of Culture, Rima Abdul-Malak, “to bring together all the players in the sector without delay, in order to invite them to determine together, in a responsible and united manner, new sources of financing […] “.

Without an agreement by September 30, 2023, “the government will reserve the possibility of seizing Parliament with a mandatory contribution from streaming platforms, of the type proposed by Senator Julien Bargeton”. The latter recommended, in a recent report, the adoption of a 1.75% tax on platform turnover.

Impact on the consumer

Contacted, the parliamentarian underlines that this consultation – the terms of which remain to be defined – must make it possible to bring out “the widest possible consensus around a fair contribution for the world of music”. But the timing is very tight to find an agreement, while the recorded music sector and the live performance sector have been at odds on this issue for more than a year.

This makes the streaming tax hypothesis all the more credible. On the side of the streamers, the announcement has the effect of a hammer blow. “This tax would be similar to a new production tax, based on independent European and French players in music streaming such as Deezer, Spotify and Qobuz, whose activity is not yet profitable, ”says the Union of Online Music Service Publishers (ESML). The SNEP, which represents the majors of the disc and a part of the independent producers, was also opposed to this levy.

The ESML points to competition from Gafa, “which do not contribute to the same extent as us to the financing of the music industry” and fears “the catastrophic consequences of this tax on music streaming, on rights holders and ultimately on the creation”. She recalls that “French and European independent online music services are already the main contributors to the financing of the creation and export of the French music industry and participate fully in French and Francophone cultural diversity”. In France, 90% of the most listened to artists on Spotify in 2022 were French, indicates the Swedish streaming service.

Parliamentary debate

“It is problematic to base a new levy on platforms which are the main contributors to the growth of the music industry, and which have not yet found their economic balance because they continue to invest in the development of the ecosystem, confirms Stephane Rougeot, Deputy CEO of Deezer. We have planned to reach profitability in 2025; we cannot absorb this additional tax which represents almost 10% of our gross margin. We will have no choice but to p it on to the consumer. »

Senator Bargeton, who is delighted with the decision, puts the effect of the levy into perspective. “This corresponds to around 17 cents per subscription, for platforms which are already increasing their prices, it is quite absorbable”, he judges. He also believes that this funding, intended to help the ecosystem, will affect the entire sector.

“The announcement of the President of the Republic is particularly welcome and has been welcomed by our sector”, also rejoices Malika Seguineau, the general manager of Prodiss, representing private producers of shows. “The President of the Republic was very clear, proposing to go through an agreement, or failing that the State will take its responsibilities”, she adds, specifying that her union is available for the first meetings. . Twenty other professional music organizations also applauded this arbitration in a joint statement.

The dice are not cast, hope on his side the SNP. In a press release with the union of show producers La Scène Indépendante, the main representative of the labels welcomes “the announcement by the President of the Republic of an immediate consultation of the actors of the music sector in order to define a source of financing respectful of its major economic balances”. Recalling that “the streaming situation remains fragile”, the organization believes that “an agreement is possible. It will be done if it takes into account all the conditions in which the different sectors of our sector operate, in a real logic of equity”.

If the consultation led to a tax, it should be voted on during the examination of the next finance bill. In its press release, the Elysée also announces its desire to bring the question of the remuneration of artists by streaming platforms to the European level.

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