Spotify has made a U-turn on its earlier decision to exit the Uruguayan market. The company received assurances from the government that the new copyright law changes would not lead to additional costs for Spotify.
Key Takeaway
Spotify has decided to remain in the Uruguayan market after receiving assurances from the government that it will not incur extra costs due to the new copyright law changes. The company’s concerns about potential double payments for artists have been addressed, leading to a resolution that allows Spotify to continue its operations in Uruguay.
What Led to Spotify’s Initial Decision?
Last October, Uruguay passed a new law that included a provision for fair and equitable remuneration for artists. This encompassed not only the main featured artists but also all individuals involved in the creation of a recording, such as composers, performers, and session musicians.
Spotify’s Concerns and Public Response
Spotify expressed concerns about potentially having to pay artists twice for the same songs due to the new law. The company sought clarity on who would be responsible for issuing payments to the additional individuals covered by the law, as it already pays a significant portion of its revenue to record labels and publishers.
Spotify announced its decision to phase out its service in Uruguay, prompting over 40,000 people to sign a petition urging the government to ensure Spotify’s continued presence in the country. President Luis Lacalle Pou acknowledged the significance of the platform and indicated that the government was working to resolve the situation.
Resolution and Government Assurances
Following the public outcry and discussions with the government, Spotify confirmed that it will not exit the Uruguayan market. The government assured the company that it would not be held responsible for additional costs related to artist payments. Spotify emphasized that the rightsholders, to whom it already pays approximately 70% of its music-generated revenue, should assume responsibility for these costs.
