Spotify is to phase out its service in Uruguay after the passing of a new music copyright bill requiring “fair and equitable remuneration” for authors, composers, performers, directors and screenwriters.
In October, the country’s parliament voted on a budget bill that included two new articles: per article 284, social networks and the internet are to be added “as formats for which, if a song is reproduced, the performer is entitled to financial remuneration” – namely if a link to a song is shared online.
Article 285 will put 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”.
In response, Spotify said in a statement on 20 November that without changes to the 2023 Rendición de Cuentas law, the streaming platform “will, unfortunately, begin to phase out its service in Uruguay effective 1 January 2024” and cease trading in the market in February 2024.
The Swedish company seeks confirmation on whether additional costs to be paid to musicians are the responsibility of rights holders or the streaming platforms, arguing that the latter means that it would be required “to pay twice for the same music”, Music Business Worldwide reports.
The statement continued: “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.”
The platform claimed that it had contributed to a 20% growth in Uruguay’s music industry in 2022. That year, the South American nation was the 53rd largest market for music.
The move comes as Spotify unveils its new streaming payment policies for artists and labels: cutting back on fraudulent streams, increasing the minimum payable track length for “noise” content such as rain and sea sounds and – most controversially – eliminating payment for songs with fewer than 1,000 streams, averaging an annual £2.39 in annual royalties.
Spotify claims that 0.5% of all tracks have fewer than 1,000 streams, and many distributors do not pay out such low amounts – and hold on to the money, Variety reports.