In an announcement today, popular music streaming platform Spotify revealed a price hike for Premium Subscriptions in France. As a consequence of a new tax law in the country, consumers will have to pay part of the expense faced by Spotify.
The company blog post noted that the French government has levied a new tax called the "CNM tax." In France, there is a regulatory public body called the Center for National Music, which was established in 2020. The goal of the party is to commission research on the French music industry and support live industry and record labels with financial aid.
With the tax in place, the CNM will act as a middleman. Spotify argued that despite opposing the tax, the government still decided to force online music streaming services to pay up. This is so the public body could be financed.
However, Spotify showed concerns regarding the funds and how they will be channeled to support artists and the music industry. Spotify wrote:
“This tax will generate approximately 15 million euros, when the CNM’s administrative budget (office fees, personnel, capital expenditure, media monitoring or professional training etc.) sits at 20.2 million euros. Our concern is that possibly less than half of its overall 146.9 million euros budget will find its way toward effectively aiding music.”
With the tax, the French government will receive about two-thirds of every euro ($1.09) Spotify generates. Spotify also added that the current business model "simply can"t absorb any additional taxes."
In an interview back in 2023 with a French news site, Spotify"s CEO mentioned that the company has a fragile financial balance, so the tax puts it at a disadvantage. Thus, the results of the new law will manifest in increased fees for French subscribers. So much so, that the prices will be the highest across all of the European Union.
As of yet, the company has not disclosed the exact pricing structure, but a previous news report disclosed a price hike of about 10%.
The CNM tax was first introduced by French President Emmanuel Macron in December 2023. In addition to Spotify, companies like Apple, Deezer, and Meta also criticized the tax.