Spotify Axing Service In Uruguay To Avoid Paying Artists More

Spotify users in Uruguay will soon be forced to jump ship, after the streaming giant confirmed it would be cease operations in the Latin America country starting January 1, 2024.

READ MORE: Why Is Everyone Mad At Spotify?

The move comes in response to Uruguay’s newly modified copyright laws – in October, after the Uruguayan Society of Performers (SUDEI) petitioned for laws to be more artist-friendly – the Parliament of Uruguay voted to amend Articles 284 and 285 in the ‘Rendición de Cuentas’ law, meaning artists will be entitled to “fair and equitable remuneration” for the use and distribution of their works.

Back in August, local outlet El Pais reported on Spotify’s trepidation towards the proposed changes to the laws, with the company threatening to axe its service in Uruguay if they were to be enacted.

In a statement published by Music Business Worldwide (MBW), a spokesperson for Spotify said the company has been “forced” to follow through with those threats – phasing out its operations on January 1 before the service is “fully cease[d]” by February – citing a lack of “clarity on the changes to music copyright laws” in Uruguay.

The statement continues: “Spotify already pays nearly 70 [percent] of every dollar it generates from music to the record labels and publishers that own the rights for music, and represent and pay artists and songwriters. Any additional payments would make our business untenable. We are proud to be their largest revenue driver, having contributed more than $40 [billion] to date. And because of streaming, the music industry in Uruguay has grown 20 [percent] in 2022 alone.

“We want to continue giving artists the opportunity to connect with listeners, and Uruguayan fans the opportunity to enjoy and be inspired by their music. Changes that could force Spotify to pay twice for the same music would make our business of connecting artists and fans unsustainable, and regrettably leaves us no choice but to stop being available in Uruguay.”

As pointed out by MBW, Uruguay closed 2022 out as the 53rd largest global market for recorded music, with streaming services accounting for 64.4 percent of its $13.2 million revenue pull-in ($8.5 million).

The news follows reports of Spotify gearing up to change the way it distributes royalties to artists worldwide; starting next year, a song will need to clear 1,000 streams annually to be eligible for revenue.