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Spotify Technology SA (NYSE:SPOT) looks to raise its subscription fees in France, directly responding to a new tax targeting music-streaming services, which took effect on January 1.
This tax, amounting to a 1.2% levy, is part of France’s effort to support the national music sector, with funds directed to the Centre National de la Musique (CNM).
Spotify, alongside other affected services like Deezer, Apple Inc (NASDAQ:AAPL) Apple Music, and Alphabet Inc (NASDAQ: GOOG() (NASDAQ:GOOGL) Google’s YouTube Music, have been openly critical of this legislation, especially since Spotify leads in the French market, TechCrunch reports.
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This decision follows Spotify’s previous warnings of taking significant actions within France, including withdrawing support from major music festivals.
Despite the similarities between the French tax and legislative developments in Uruguay, where Spotify threatened to withdraw entirely before retracting its decision, the streaming giant has not suggested exiting the French market.
Instead, Spotify has chosen to adjust its pricing strategy to manage the financial impact of the tax.
In February, Spotify reported fourth-quarter revenue of $3.95 billion, up 22.3% year-on-year, below the consensus of $4.06 billion. EPS loss of $(0.39) for the same period compares to a consensus loss of $(0.14).
Analysts projected the company to reach $1 billion in profits in 2024, backed by MAU and subscription growth, broad price increases, and declining operating expenditure.
Investors can gain exposure to Spotify via Global X Social Media ETF (NASDAQ:SOCL) and ProShares On-Demand ETF (NYSE:OND).
Price action: SPOT shares closed higher by 0.39% at $268.03 on Wednesday.
Also Read: Spotify Inks Multiyear Deal With Podcast King Joe Rogan Amid Shifting Strategy
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Spotify Photo by esthermm via Shutterstock
