Music streaming giant Spotify is considering withdrawal from Uruguay if proposed amendments to music copyright laws are ratified.
The modifications were initiated by the Uruguayan Society of Performers (SUDEI) earlier this year, advocating for revisions to the nation’s music copyright regulations. The proposal seeks to enable performers to receive compensation for reproductions on platforms such as Spotify and YouTube.
This week, the Parliament of Uruguay is voting on a budget bill that includes these proposed changes (Articles 284 & 285 in the Rendición de Cuentas).
According to local publication El Observador, SUDEI successfully lobbied for the inclusion of two articles in Uruguay’s ‘Rendición de Cuentas’—Articles 284 and 285 — through the Executive Branch of the government.
SUDEI spokesperson Gabriela Pintos told El Observador at the time that the group is not against the platforms, but is campaigning for the fair distribution of revenue.
As explained by Bloomberg Línea, Article 284 would see ‘social networks and the Internet [added] as formats for which, if a song is reproduced, the performer is entitled to financial remuneration’.
Bloomberg Línea explains further that the introduction of the broader focused Article 285 would set 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’.
As reported by El Pais, Spotify sent a letter to the Minister of Education and Culture, Pablo Da Silveira in July arguing that the proposed changes imply “an additional mandatory payment for music services”.
In other words, Spotify argues that if the amendments are made, it would potentially be required “to pay twice for the same music,” a move SPOT claims could jeopardize its operations in the Uruguayan market.
“If implemented, and Spotify were forced to pay twice for the same music, it would make our business of connecting artists and fans unsustainable in this market. Spotify would then have no choice but to stop being available in Uruguay, to the detriment of artists and fans,” the company said in a statement issued to MBW.
“If these articles are included in this bill and Spotify is forced to pay twice, we will have no choice but to cease service in Uruguay.”
Spotify
Added Spotify: “Spotify pays nearly 70% of every dollar it generates from music to the record labels and publishers that represent and pay artists and songwriters, and we are their largest revenue driver, having contributed more than $40 billion to date.
“And because of streaming, the music industry in Uruguay has grown 20% in 2022 alone. We want to continue giving artists the opportunity to live off their art and Uruguayan fans the opportunity to enjoy and be inspired by it.”
Spotify issued a warning in its letter to Uruguay’s Ministry of Education and Culture, cautioning of potential withdrawal from the market if the proposed changes are enacted.
The Latin American Internet Association (ALAI) echoed Spotify’s concerns, cautioning senators that the changes could significantly impact various sectors, including civil society, the cultural industry, education, research, and technological development.
The Parliament of Uruguay is set to deliberate on the proposed changes within the budget bill this week. Spotify reiterated its stance, saying ina. statement to MBW: “If these articles are included in this bill and Spotify is forced to pay twice, we will have no choice but to cease service in Uruguay.”
The development comes as Spotify continues to maintain its dominant positioning in the Latin American streaming market.
According to Netscribes, Spotify held an 83% share of the market in 2021. Data from Statista showed that Spotify had 46.2 million Premium subscribers in Latin America in the second quarter of 2023.
Spotify added a total of 10 million Premium subscribers globally in the second quarter, “led by Europe and Latin America,” the company said in July.
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