Last month, music streaming giant Spotify threatened to withdraw its service from Uruguay over proposed amendments to music copyright law in the market.
The modifications were initiated by the Uruguayan Society of Performers (SUDEI) earlier this year, advocating for revisions to the South American nation’s music copyright regulations.
In October, the Parliament of Uruguay voted on a budget bill that included these proposed changes, Articles 284 & 285 in the Rendición de Cuentas law.
That bill (Rendición de Cuentas) has since passed, and a Spotify spokesperson said in a statement on Monday (November 20) that, “Without clarity on the changes to music copyright laws included in the 2023 Rendición de Cuentas law” the streaming platform “will, unfortunately, begin to phase out its service in Uruguay effective January 1, 2024.”
Spotify says that it will then “fully cease” service in the market by February 2024.
The clarity Spotify appears to want confirmation on is whether or not “any additional costs are the responsibility of rights holders” or if those “additional costs” will need to be paid for by streaming platforms.
As explained here by Bloomberg Línea, Article 284 will see ‘social networks and the Internet [added] as formats for which, if a song is reproduced, the performer is entitled to financial remuneration’.
Bloomberg Línea explained further that the introduction of the broader focused Article 285 will set into copyright law the ‘right to a fair and equitable remuneration’ for all ‘agreements entered into by authors, composers, performers, directors and screenwriters with respect to their faculty of public communication and making available to the public of phonograms and audiovisual recordings’.
As reported by news outlet El Pais back in August, Spotify sent a letter to the Minister of Education and Culture, Pablo Da Silveira in July, arguing that the proposed changes imply “an additional mandatory payment for music services”.
In other words, Spotify argues that the introduction of this so-called equitable remuneration in the market via the amendments to music copyright law in Uruguay means that the streaming service will be required “to pay twice for the same music” – a move SPOT says will jeopardize its operations in the Uruguayan market.
“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.”
Spotify spokesperson
On Monday (November 20), via a statement issued by a Spotify spokesperson pointing to a lack of clarity around the changes to Uruguay’s copyright laws in the now-passed bill, the company stated that “changes that could force Spotify to pay twice for the same music would make our business of connecting artists and fans unsustainable”.
The Spotify spokesperson added that this lack of clarity “regrettably leaves us no choice but to stop being available in Uruguay”.
You can read the statement from Spotify’s spokesperson in full 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.”
Uruguay was the world’s 53rd largest recorded-music market in 2022, with revenues of $13.2 million (up 20.2% YoY) and music streaming accounting for 64.4% of those revenues, according to IFPI data, as reported by Music Ally last month.
Spotify claims that “because of streaming, the music industry in Uruguay has grown 20% in 2022 alone”.
While only a smaller player in the global music business, the debate around introducing Equitable Remuneration into copyright law in Uruguay will be watched closely in other markets such as in the UK (the world’s third-largest recorded music market) for example, where the notion of introducing ‘ER’ is a matter of serious contention.
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