Last month, music streaming giant Spotify threatened to pull its service from Uruguay over proposed changes to the market’s music copyright law.
The changes were initiated by the Uruguayan Society of Performers (SUDEI) earlier this year, advocating for a review of music copyright regulations in the South American nation.
In October, Uruguay’s parliament voted on a budget bill that included these proposed changes, articles 284 and 285 of the accountability law.
That bill (Rendición de Cuentas) has since passed, and a Spotify spokesperson said in a statement on Monday (November 20) that “No clarity on the changes to music copyright laws included in the Rendición de Cuentas Act of 2023.” , the streaming platform “will unfortunately begin phasing out its service in Uruguay starting January 1, 2024.”
Spotify says it will then “completely discontinue” the service on the market by February 2024.
The clarity that Spotify seems to want confirmation on is whether “any additional costs are the responsibility of the rights holders” or whether these “additional costs” will have to be paid by streaming platforms.
As explained here by Bloomberg Line, Article 284 will see “social networks and the Internet [added] as formats for which, when a song is reproduced, the performer is entitled to financial remuneration’.
Bloomberg Line further explained that the introduction of section 285 with a broader focus would enshrine in copyright law “the right to fair and fair remuneration” for all “agreements concluded by authors, composers, performers, directors and screenwriters with regard to their ability to communicate to the public and to make phonograms and audiovisual recordings available to the public”.
As reported by the news bulletin The country back in August, Spotify sent a letter to Education and Culture Minister Pablo Da Silveira in July, arguing that the proposed changes entailed “an additional mandatory payment for music services.”
In other words, Spotify claims that introducing this so-called fair remuneration to the market through changes to Uruguay’s music copyright law means that the streaming service will have to “pay twice for the same music” – a move that which 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 unfortunately leave us no choice but to stop being available in Uruguay.”
Spotify spokesperson
On Monday (November 20), in a statement issued by a Spotify spokesperson pointing out the lack of clarity surrounding changes to Uruguay’s copyright laws in the already passed bill, the company said that “changes that could force Spotify to pay two times for the same music would make our business of connecting artists and fans unsustainable”.
The Spotify spokesperson added that this lack of clarity “unfortunately 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 removing its service in Uruguay from 1 January 2024 and is completely shutting down the service by February, to the detriment of artists and fans.
“Spotify already pays almost 70% of every dollar it generates from music to the record companies and publishers who own the rights to the music and represent and pay artists and songwriters.
“Any additional payments would make our business unviable. We’re proud to be their biggest revenue driver, contributing more than $40 billion to date. And thanks to streaming, Uruguay’s music industry is set to grow by 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 unfortunately leave us no choice but to stop being available in Uruguay.”
Uruguay was the 53rd largest recorded music market in the world in 2022 with revenue of $13.2 million (up 20.2% year-over-year) and accounting for music streaming 64.4% of these revenues, according to IFPI data, as reported by A musical ally last month.
Spotify claims that “due to streaming, the music industry in Uruguay has grown 20% only in 2022″.
Although only a minor player in the global music business, the debate surrounding the introduction of Equitable Remuneration into Uruguay’s copyright law will be closely watched in other markets such as the UK (the world’s third largest recorded music market) , where the concept of introducing “emergency care” is a matter of serious controversy.
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