Spotify reconsiders Uruguay exit after government guarantees artist payments

Spotify reconsidered leaving Uruguay after the government promised copyright law changes would not cost it.

For those unfamiliar with Uruguay’s music streaming scene, the story went like this. Last October, Uruguay mandated “fair and equitable” artist pay. Besides the “featured” artist, this included composers, performers, session musicians, and others on a recording.

Spotify says it pays 70% of music revenue to labels and publishers. The company sought clarity on who would pay artists who contributed to a record, ensuring that the people it already pays directly would pay whoever the new law covers from their existing funds.

Spotify may pay twice for songs due to the bill. Without government accountability, the company’s artist-fan connection business may fail.

Due to this, Spotify announced that it would phase out its Uruguay service on January 1, 2024, and close completely a month later.

Stage left exit
Spotify succeeded in blaming the government for its impending exit, with over 40,000 people signing a petition demanding that the Uruguayan government guarantee the “permanence of Spotify in our country.”

President Luis Lacalle Pou told reporters that the government was “in talks” to resolve the crisis, saying, “You have to be balanced; we understand that it is a very important platform,” Teledoce reported.

No matter who was to blame, the situation was becoming a political headache, which has now been resolved by Spotify’s assurances that it won’t be held liable for artist payments.

The Uruguayan government has shown that it values Spotify’s value to local artists, songwriters, and fans, Spotify wrote today. The clarification of recent music copyright law changes means that rightsholders, to whom Spotify already pays 70% of every dollar it generates for music, should pay these costs.