Could the introduction of a 1.75% tax on the turnover of music streaming platforms, proposed to support the industry, lead to an increase in the cost of subscriptions to these services?
Although music streaming platforms such as Spotify, Deezer and Apple Music are popular with many listeners, their business model is not profitable enough for music creation. To solve this problem, the government is considering a plan similar to the CNC for cinema by introducing a tax of 1.75% of the turnover of music streaming services. This tax would also apply to YouTube and TikTok, despite being free. However, it is possible that this tax will lead to an increase in subscription prices.
20 million additional euros thanks to a tax of 1.75%
The National Music Center (CNM) must respond to an ambitious roadmap, including the international development of French creations and the guarantee of cultural diversity. However, the financial means are lacking. The government had previously fed the CNM coffers irregularly during the health crisis, but it is necessary to find long-term funding.
Currently, the CNM is mainly financed by a 3.5% tax on live performance ticketing, with one-off contributions from the State. Two-thirds of this tax goes to entertainment professionals, while one-third feeds the common pot of the sector.
The senator who suggests changing the way the tax is distributed proposes that half of the money from this tax be given to the common pot. However, this solution would not be enough to fill the coffers. To avoid new state funding, the senator recommends instead taking nearly 1.75% of the turnover of Deezer, Spotify, Apple Music, YouTube and TikTok, in order to finance the CNM. This proposal would raise approximately 20 million additional euros for the CNM.
The cost of streaming subscriptions is about to increase?
Despite the various measures put in place, a report by Julien Bargeton indicates that the CNM is facing a deficit of 30 to 40 million euros. To remedy this, the 1.75% tax on the turnover of music streaming platforms should bring in 20 million euros.
However, it is difficult to imagine that consumers will not have to suffer an increase in the price of the subscription. Music streaming platforms will have the power to decide whether or not to raise their prices. This tax will be revised in 2024 as part of the finance bill.
Overall, the CNM lacks the financial resources to operate effectively, and an increase in the subscription price for consumers could be a possible solution. The final decision will be taken by the music streaming platforms and the tax will be reviewed when the finance bill is drawn up in 2024.
The coming months will therefore be crucial for the future of CNM and music streaming platforms.
