Spotify Announces Uruguay Exit Over Copyright Law Overhaul: ‘Additional Payments Would Make Our Business Untenable’

spotify uruguay exit
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spotify uruguay exit
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Punta del Este, Uruguay. Photo Credit: Leandro Hernández

Early last month, Spotify threatened to exit Uruguay unless lawmakers modified a planned copyright law overhaul. Now, in the absence of these changes, the streaming service says it’s set to begin winding down in the nation of 3.5 million residents.

Spotify just recently disclosed its plans to withdraw from Uruguay, where the relevant law is expected to go into effect on January 1st, kicking off negotiations between rightsholders and impacted internet platforms on implementation specifics.

As described by local media, the relevant copyright alterations have added said internet platforms, among them Spotify, to the list of mediums from which creators and rightsholders can seek remuneration for the use of their works.

Proponents of the measure have billed the pivot as a simple transfer of global revenue to domestic professionals. Unsurprisingly, though, Spotify doesn’t feel the same and has emphasized its position that the switch would, among other things, disrupt existing licensing deals and render overlapping payments the norm.

But the stance and more in-depth criticism, expressed to lawmakers and government officials in letters, evidently failed to bring about the desired result for Spotify. And it’s against this backdrop that the company says it’s prepping a January 1st winddown in Uruguay ahead of a full-scale shutdown before February.

“Spotify already pays nearly 70% 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,” the company relayed in a formal statement. “Any additional payments would make our business untenable.

“Spotify wishes to continue giving artists the opportunity to connect with listeners, and Uruguayan fans the opportunity to enjoy and be inspired by their music,” proceeded the platform. “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.

“Without urgently-needed clarity on the changes to music copyright laws included in the 2023 Rendición de Cuentas [Accountability] law, Spotify will, unfortunately, begin to phase out its service in Uruguay effective January 1, 2024. Spotify will be completely unavailable in Uruguay by February, 2024.”

Of course, time will tell whether the coming six weeks bring about the developments sought by Spotify. But according to El Observador, at least one of the lawmakers behind the relevant measures, uninclined to backtrack amid discussions about implementation details, has criticized Spotify’s description of the articles at hand.

Meanwhile, Uruguay’s president, Luis Lacalle Pou, had been preparing to depart on an international trip when Spotify requested a meeting last week, per a different report from the same outlet. Consequently, the executive office hasn’t yet responded to the corresponding letter, El Observador indicated today.