Spotify Is Ending Its Service In Uruguay Over A New Law Demanding Fair Pay For Artists

In a significant development for the music streaming landscape, Spotify has officially confirmed the cessation of its services in Uruguay. This decision follows the approval of an amendment to Uruguay’s copyright law by the country’s Parliament, demanding “equitable remuneration” for artists.

The catalyst for this move was the bill titled “Rendición de Cuentas,” introduced earlier this year by the Uruguayan Society of Performers (SUDEI). This legislation aimed to amend Articles 284 and 285 of Uruguay’s copyright law, introducing the requirement for “fair and equitable remuneration” for artists concerning their recorded material. Additionally, the bill sought to acknowledge “social networks and the Internet” as formats entitling performers to financial remuneration when their music is reproduced.

Spotify had initially expressed concerns and even threatened to end its service when the bill was first tabled in July. The streaming giant cited a lack of clarity and the potential imposition of an additional mandatory payment for music services as major issues.

A representative for Spotify outlined the possible repercussions in a letter to Pablo Da Silveira, Uruguay’s Minister of Education. The representative stated that if the proposed reform was to become law, it might make Spotify’s operations in Uruguay impractical and negatively impact both the country’s music industry and its fan base.

Spotify stressed its support for musicians and the music business in an official statement, noting that it currently gives record labels and publishers close to 70% of every dollar made from music sales. The business contended that the amendment’s proposed new payments would bankrupt them.

SUDEI spokesperson Gabriela Pintos clarified that the organization is not against platforms but is advocating for fair royalty distribution. Pintos explained that the legislation aims to ensure that artists can negotiate a percentage that corresponds to their contributions, rather than being a demand for increased contributions from streaming services.

As Spotify begins to phase out its service in Uruguay, the broader implications of this clash between streaming platforms and legislative changes in the music industry will undoubtedly spark further discussions on fair compensation for artists in the digital age.

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