After Uruguay’s Parliament amended the country’s copyright law to require “equitable remuneration” for artists, Spotify has announced it will phase out service to the country starting January 1, with a complete shutdown by February.
The legislative change, known as “Rendición de Cuentas,” was initiated by the Uruguayan Society of Performers (SUDEI). The bill mandates financial remuneration for artists when their songs are played on social networks and the internet. Spotify had initially expressed concerns over double-payment of royalties when the bill was introduced in July, arguing that the proposed changes lacked clarity and would result in an undue financial burden on the company.
Confirming its withdrawal from the Uruguayan market, Spotify emphasized that it already pays nearly 70% of its music-generated revenue to record labels and publishers, contributing over $40 billion to the industry. Spotify also highlighted its role in the 20% growth of Uruguay’s music industry in 2022.
SUDEI spokesperson Gabriela Pintos clarified that the organization is not against platforms like Spotify but is advocating for fair distribution of royalties. Pintos emphasized that the legislation is not demanding an increase in contributions from streaming services but aims to ensure artists can negotiate a fair share of digital reproduction revenues.
Spotify’s change comes as they significantly restructure the company’s US royalty distribution system so that tracks must accumulate at least 1000 streams in a year to be eligible for payments. Additionally, functional tracks like white noise will be subject to different royalty criteria compared to traditional music tracks.
