Spotify to cease operations in Uruguay following law requiring “equitable renumeration” for artists
“Any additional payments would make our business untenable,” the company says.
Credit: Mateusz Slodkowski/SOPA Images/LightRocket via Getty Images
Spotify’s services will no longer be available in Uruguay after the country passed a law requiring “equitable remuneration” for artists.
In a statement by a Spotify spokesperson on Monday (20 November) [per Music Business Worldwide], it was confirmed that the company would “phase out” its platform in Uruguay from January 1, 2024, and cease operations fully by February.
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“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,” the spokesperson said.
Per Mixmag, The bill in question, Rendición de Cuentas, was approved by the Uruguayan parliament earlier this year, and introduces a requirement for “fair and equitable remuneration” of artists by streaming platforms.
Spotify cites the new law’s ambiguity as a primary reason behind its cessation of operations in Uruguay.
“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,” the company says.
“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,” it continued.
“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.”
Earlier this month, it was reported that Spotify’s royalty payout threshold would be set at 1,000 streams. Tracks now need to get 1,000 streams in 12 months – just over 80 streams per month – in order to begin earning streaming revenue.
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