An industry group representing Amazon Music, Apple Music and Spotify has criticized a new Canadian rule that would require major streaming services to pay 5% of their revenue to various groups that support Canadian content creation.
“We are deeply concerned about today’s decision to impose a discriminatory tax on music streaming services that already make significant contributions to Canadian artists and culture.” Graham DavisPresident and CEO digital media association (Dima), said in a statement released on Tuesday (June 4).
“Streaming is a major revenue source and growth engine for Canadian music, benefiting the entire industry, creators, fans and consumers. This is effectively a protectionist subsidy for broadcasting.
Canadian Online Streaming ActA new law enacted in 2023 expands the powers of the federal broadcasting and telecommunications regulator Canadian Radio-television and Telecommunications Commission (CRTC) – includes online content.
The CRTC announced on Tuesday that, effective September 1 of this year, any broadcaster not affiliated with the Canadian Broadcasting Corporation with revenue of at least C$25 million ($18.3 million) must be paid annually in Canada 5% A portion of this revenue goes toward a number of programs designed to help Canadian content creators.
The rules echo similar requirements enforced by the Canadian Broadcasting Corporation for decades.
“Streaming is a major revenue source and growth engine for Canadian music, benefiting the entire industry, creators, fans and consumers. This is effectively a protectionist subsidy for broadcasting.
Graham Davies, Dima
Affected platforms include Netflix and Disney+ in terms of video, and Spotify, apple musicand Google play music On the audio side.
Music streaming services (what the CRTC calls “audio online businesses”) will have to pay fees to a number of funds and organizations, including Foundation assists Canadian talent with recording (factor) and its French-Canadian equivalent, musical action.
Other beneficiaries will be Canadian Star-Making Fundproviding touring and promotional support for emerging Canadian artists, and working with canadian musican industry group representing the country’s major brands, including Sony Music Entertainment Canada, universal music canadaand Warner Music Canada.
DSP revenue will also be used to Canadian Community Broadcasting Foundationproviding financial assistance to local radio stations, Aboriginal Music Officeand a new fund to support Aboriginal music.
Perhaps most surprisingly, 1.5% Revenue from the Music DSP will go towards a “new temporary fund to support local news production at commercial radio stations”.
Higher prices for streaming subscribers?
The Online Streaming Bill has the support of many broadcasters and content creators, as well as unions representing workers at Canada’s major media companies. The move has been opposed by global platform operators such as Google and Spotify, as well as consumer rights groups, who worry that new taxes on streaming services will be passed on to subscribers.
Unifora union representing employees of vertically integrated broadcast and print media companies in Canada, such as Bell Media and rogerspraising the CRTC’s new rules.
“Foreign streamers have been in direct competition with Canadian broadcasters, and they should have the same responsibility and obligation to support local news and Canadian storytelling,” said the president of Unifor National. Lana Payne said in a statement.
“Canadian artists earn more from streaming outside of Canada than they do domestically…Canada has become the third most successful country in the world for exporting artists through Spotify.”
Spotify
However, the rules have received mixed reviews from consumer rights groups open media.
“It appears likely that prices will increase for Canadian consumers” following the CRTC’s decision, Tweet Matt Hatfield, Group Executive Director. “For a low-margin business like Spotify, they’re probably going to pass a lot of that 5% tax on to us.”
Hatfield also criticized the new rules for focusing most funding on traditional broadcasters rather than digital creators.
“This must change,” he wrote.
In a filing with the CRTC earlier this year, Spotify said it already contributes significantly to the creation of Canadian and indigenous music and that a new tax on its revenue would force it to cut that support or raise prices for consumers.
“Spotify’s continued investment in local music teams supports the Canadian music ecosystem. Our music teams…fulfill Spotify’s mission to be the best for creators by partnering with Canadian artists and industry, and promoting Canadian and Indigenous artists at home and around the world. Home Mission.
“While traditional radio stations can only play Canadian artists to Canadians, Spotify allows listeners around the world to discover and listen to Canadian artists. In fact, Canadian artists make more money from streaming outside of Canada than they do The income is even higher at home…Canada has become the third most successful country in the world in exporting artists through Spotify.
Spotify also noted that the company has “never before been regulated in this way by the European Commission or any other regulator elsewhere in the world.”
In a statement released on Tuesday, DiMA said it would review the CRTC’s decision with its members “in order to plan next steps accordingly.”global music business
