According to some reports, Spotify would increase prices for its subscribers in Canada.
The move comes amid the implementation of the Online Broadcasting Act, which sees the Canadian Radio-television and Telecommunications Commission (CRTC) requiring major foreign broadcasters – those with revenues above $25 million dollars – paying 5% of their income as a base contribution to funds intended to finance Canadian content.
The price increase also comes as the streaming giant increases costs in overseas markets. In July, Spotify increased its prices in the United States from 11 to 12 dollars per month for individuals. This increase follows a previous increase in 2023, which affected both the United States and Canada, and was the first price increase for the app since 2011.
In a statement to Billboard Canada a spokesperson for Spotify did not explicitly link the increase to the “streaming tax” but indicated that the company was part of a legal challenge against the CRTC. Spotify joined Amazon and Apple in filing legal challenges against the CRTC this summer, following the regulations’ announcement in June.
“As we continue to innovate and invest to provide our listeners with services of unparalleled value, we occasionally update our prices,” a Spotify spokesperson tells Billboard Canada. “We can also adjust our prices to reflect local macroeconomic factors and respond to market demands while providing unrivaled service. We, along with a number of third parties, have filed a legal challenge to the CRTC’s streaming tax in Canada, and will therefore not be making further public comments at this time. »
The law on streaming online was implemented this year after extensive consultations last fall. Core contributions from major broadcasters are expected to generate $200 million in funding for Canadian content, with contributions directed to “areas of immediate need,” including funding agencies FACTOR and Musicaction, as well as the Office of indigenous music.
Music rights holders have called for an increase in streaming prices, which do not match inflation over the past decade. Spotify re-evaluated its pricing and royalty models by investing in audiobooks, making changes to its revenue sharing, which resulted in demonetizing songs receiving fewer than 1,000 plays per year.
The company also adjusted its presence in Canada, laying off Nathan Wiszniak, head of artist and label partnerships at Spotify Canada, in a series of job cuts last December. The company has since hired Elizabeth Phipps as head of record label partnerships in Canada.
During consultations on the Online Streaming Act last fall, Spotify’s Olivia Regnier testified before the government suggesting the company could make changes to how it operates in Canada if forced to pay.
“If we are asked to make significant contributions, independent of our existing investments, Spotify will have to make financial decisions to sustainably manage its business,” Regnier said. “Additional costs could require us to reduce our spending, including our resources for editorial, partnership and promotional programs in Canada, reduce resources currently returned to the music ecosystem or increase prices for Canadian consumers” , she continued.
When the decision was announced in June, organizations like the Motion Picture Association – Canada, which represents platforms like Netflix et Disney +expressed their dismay.
Others, like the Canadian Independent Music Association (CIMA), welcomed the announcement. “As we look to the future of music in Canada, this decision lays the foundation for a dynamic partnership with digital platforms that will allow Canadian talent to flourish both domestically and internationally,” said Andrew Cash, president of CIMA.
Spotify has more than 600 million users and achieved a global turnover of 3.6 billion euros in the first quarter of this year.
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