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Spotify said on Thursday it will raise its subscription prices in France in response to a new tax designed to support the nation\u2019s music industry. The company wrote an open letter<\/a> denouncing the tax, which France\u2019s government passed in late 2023. The streaming service hasn\u2019t yet said how high the price hike will be, other than teasing, \u201cFrench users will now pay the highest subscriptions across the European Union.\u201d<\/p>\n France\u2019s CNM tax imposes<\/a> a levy on music services<\/a> that earn over 20 million euros ($21.9 million) in the country: Spotify, Apple Music<\/a> and Deezer<\/a>. (Apple Music and Deezer have opposed the tax but haven\u2019t announced similar price hikes.) The companies pay the new 1.2 percent charge on all streaming revenue generated in the country. Social media companies licensing music, including TikTok and Facebook, are also subject to the tax. The fees will go to the nation\u2019s Centre National de la Musique<\/a> (CNM), a public institution supporting and promoting the French music industry.<\/p>\n Spotify\u2019s initial response in December was to pull<\/a> financial support from French music festivals Francofolies de la Rochelle<\/a> and Printemps de Bourges<\/a>. The company threatened<\/a> to pull its services from Uruguay when a similar tax was announced there but ultimately backed down<\/a> when the Uruguayan government said streaming services wouldn\u2019t have to cover any costs.<\/p>\n Spotify hasn\u2019t made similar threats to exit France, likely because the country is much more crucial to its bottom line. Instead, it\u2019s waging a public pressure campaign, including the music service painting the tax as an unnecessary government money grab that only partially funds the music industry.<\/p>\n \u201cThis tax will generate approximately 15 million euros, when the CNM\u2019s administrative budget (office fees, personnel, capital expenditure, media monitoring or professional training etc.) sits at 20.2 million euros,\u201d the company wrote in the public letter. \u201cOur concern is that possibly less than half of its overall 146.9 million euros budget will find its way toward effectively aiding music.\u201d<\/p>\n Other than listing the CNM\u2019s administrative budget, Spotify didn\u2019t provide any evidence that the fees wouldn\u2019t go toward aiding music.<\/p>\n Spotify\u2019s revenue grew<\/a> 16 percent year-over-year to \u20ac3.7 billion ($4.05 billion) in Q4 2023, in what it described as \u201ca very strong quarter.\u201d Its CEO sold<\/a> $57.5 million in stock in February, following a $64 million stock sale in October 2023.<\/p>\n \u201cAs we have long said, we simply can\u2019t absorb any additional taxes,\u201d Spotify wrote. \u201cEven after making the difficult decision to reduce our artist marketing budget and support of French music festivals \u2014 which is an essential vehicle for Spotify to continue to drive hundreds of millions of euros to the music industry \u2014 it still continues to impede our ability to operate in France. Accordingly, over the coming weeks and months, we\u2019ll need to make changes to our price plan in France.\u201d<\/p>\n Spotify says French subscribers will learn more about the price hike \u201cin the coming weeks.\u201d<\/p>\n