NUPES Spotify Tax Proposal Angers Millionaire Rapper

news hardware NUPES Spotify Tax Proposal Angers Millionaire Rapper

Why is the tax on Spotify and other streaming services called the “anti-rap tax”?

This denomination seems to be coming Niska’s tweet that sparked the minor controversy in social networks. The New School judge chose the blue bird to speak about his current cause and challenge Culture Minister Rima Abdul Malak. After him, other players in the industry took the floor.

Behind this complaint from a millionaire who seems to fear a loss of 1.5% of his income above all else, there is a complex situation that most people are unaware of.

Spotify, Deezer or Apple Music might be huge behemoths, but their profitability isn’t crazy, even non-existent. Spotify, the big leader with 31% global market share (the French Deezer is at 2%), has sales of around 10 billion dollars but a profit of just under a few million (only 2 million in the last quarter of 2021). ). Until recently, Spotify was losing money every quarter.

This fragile economy is likely to be hit by a tax. To compensate for the loss, streaming services are likely to revise their contracts with music distributors. Thus, the income of the artists would actually be affected. It would be a shame to lose some finally positive momentum already shaped by runaway inflation.

Some people are afraid an increase in the price of their subscription after that tax, but we don’t believe in it. We will come back to this point later.

Rap is a specific style of music that is almost exclusively consumed in streaming. Remember 2 key figures from the reports of the SNP (Syndicat national de l’édition phonographique), the organization that distributes gold records and other sales-related awards:

• 87% of the consumption of rap albums in the top 200 in France is via streaming
• 61% of the most streamed tracks are rap tracks

Another peculiarity of rap: while it is most heard in France, This genre of music is the one that receives the fewest subsidies from CNM (National Music Center) due to the lack of representation of local actors in this body. The tax proposed by NUPES aims to close the CNM’s budget gap, which is commendable. Problem: There is then a risk that rappers’ earnings will be tapped in order to redistribute them to singers and variety artists. Hence the addition “anti-rap tax”.

To be honest, I was a freelance rapper myself in a past life and my main source of income was my music. As a relatively precarious freelancer, as long as I wasn’t having any interruptions, most of my money came from streaming services. I can only understand panic which seizes something.

Much ado about little… It’s a shame when the music industry is all about enthusiasm

Let’s keep our feet on the ground: These millions of streamed rappers are irrationally panicking for a number of reasons.

The first reason, and perhaps the most obvious, is this this amendment has very little chance of being adopted. The word of 6 NUPES MPs does not carry very strong weight in the Assembly and there are seldom the opposition amendments that get through. The plan of the opposition MPs is more to kick-start debates and bring issues back to the fore than actually get their ideas across.

Note that there is precedent the “YouTube tax” which digs into the immense revenues of giants like Netflix and Google to give them some money CNC (The national cinema and moving image center sponsors many French content creators in return). This tax has changed absolutely nothing in the level of compensation paid to French videographers, since these deals are decided either on a global level or on an individual level. There’s no reason music should be any different.

Music videos are a hit on TikTok and YouTube. In fact, clips and covers are the most viewed videos on these platforms, nothing more nothing less. These audiovisual companies are much more profitable than streaming services, and they pay almost no artists. Count around $3 for 1000 Spotify streams and less than $1 for 1000 YouTube views. As for TikTok, let’s not even talk about it, the numbers are so ridiculous.

Wouldn’t it be wiser to pick up the money where it is and redistribute it better?

Let’s get back to the case of subscriptions. We think we shouldn’t be too afraid of a price increase even if a new tax comes along. At the very least, a general surge in US streaming services could only be justified by a 1.5 percent tax coming from a single country whose population isn’t even that large.

Note that the streaming market is quite competitive and not all services are paid equally. Making 100,000 streams on Apple Music or Deezer, challenger, is MUCH more beneficial for artists than 100,000 streams on market leader Spotify.

Those that don’t dominate are willing to lose money for a few years to earn subscriptions. If Spotify raises its prices, it’s not certain that the competition will do the same. People would switch to Apple Music, for example, and that should save Niska and his colleagues a lot of money. So why be afraid?

In short, this story much ado about little. It was an opportunity for me to talk to you about this particular industry that I know well and enjoy very much, which is already taken.