Spotify significance and confirming ongoing government discussions to resolve the situation.
In a notable about-face, Spotify has decided to stay in the Uruguayan market, reassured by the government’s commitment that upcoming copyright law changes will not impose additional costs on the streaming giant.
For those not closely monitoring Uruguay’s music-streaming developments, the narrative unfolded as follows. In October, Uruguay enacted a new law mandating “fair and equitable” compensation for artists, extending beyond the main “featured” artist to encompass everyone involved in a recording, from composers and performers to session musicians and beyond.
Spotify concern stemmed from its assertion of already allocating approximately 70% of every music-generated dollar to record labels and publishers. Seeking clarity on the responsibility for compensating artists beyond the primary contributors, Spotify aimed to ensure that those already in receipt of payments would handle payouts to all contributors affected by the new law.
Expressing their apprehensions, Spotify stated in a recent blog post, “The changes in this bill could force Spotify to pay twice for the same songs, and unless the government makes it clear that record labels and publishers… should bear the responsibility for these costs, this will make our business unsustainable.”
Consequently, Spotify announced its intent to gradually withdraw its service from Uruguay, commencing on January 1, 2024, with the final closure slated a month later.
Spotify’s attempt to shift blame to the government proved effective, with over 40,000 people signing a petition urging the Uruguayan government to ensure the platform’s “continuity in our country.”
President Luis Lacalle Pou entered the fray, acknowledging Spotify’s significance and confirming ongoing government discussions to resolve the situation. Regardless of assigning blame, the situation had evolved into a political challenge, seemingly now resolved with assurances that Spotify won’t incur additional costs related to artist payments.
In a recent statement, Spotify acknowledged the Uruguayan government’s recognition of the platform’s value to local artists, songwriters, and fans. The clarification on recent changes in music copyright law ensures that rightsholders, who already receive approximately 70% of every dollar Spotify generates for music, will bear the responsibility for these costs.
