Asunción: The most popular music platform of recent times announced in mid-December that it was leaving the Paraguayan market due to a change in the law that would mean losses for the international company.
In a letter to Joel Talavera from the National Directorate of Intellectual Property (Dinapi), Spotify has officially set out its position on the draft law “amending Article 123 of Law No. 1328/98 on copyright and related rights”.
This bill was backed by national artists who wanted to push through a mandatory surcharge for streaming to offset royalties on their works.
“Spotify is the leading streaming service in Paraguay and around the world. Since our inception, we have played a critical role in reversing the decline of the piracy-plagued music industry and moving the music market forward,” reads the text, signed by Dustee Jenkins, the company’s global public affairs director.
According to the release, the number of users in Paraguay increased by 14%, reaching more than 1.1 million listeners, of which more than 125,000 are paying subscribers. Also, in 2021 alone, more than $30 billion was paid and more than $7 billion benefited artists and songwriters, including Paraguayan artists.
Spotify argues that the additional 10% fee for royalty payments to national artists “would not be sustainable for their business in Paraguay” and could lead them to “seriously consider exiting the market, ultimately to the detriment of the artists and fans would be”.
The note also mentions that despite the huge popularity of its service locally in Paraguay, Spotify is still not making a profit and that acquiring the necessary music licenses for its service generates a lower gross margin than traditional record stores or radio stations.
Status des Project
The Economic and Financial Affairs Committee, chaired by Liberal MP Celeste Amarilla, has already held two public hearings to gather information and opinions from various state institutions and the civil sector on the draft law “amending Article 123 of Law No. 1328/98 on copyright and related rights”.
Weekly / Delpy
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