Spotify tells CRTC it may raise prices if it faces fees related to Online Streaming Act

In a submission to the Canadian Radio-television and Telecommunications Commission (CRTC), music streamer Spotify warned that it would have to make changes if it faces new fees under the Online Streaming Act. Specifically, the streamer warned it could be forced to raise prices for Canadians and/or reduce resources that go back to the music ecosystem to support Canadian and Indigenous artists.

This week, the CRTC published responses to its consultation on contributions to a regulatory framework related to the Online Streaming Act. The framework would set out contributions required from broadcasting, including online services like Spotify or Netflix, to support Canadian and Indigenous content.

In the submission, Spotify highlighted several ways it already benefits Canadian artists. For example, Spotify says that royalties generated by Canadian artists from Spotify alone more than doubled from 2017 to 2022, and the streamer says that the number of Canadian artists who generated over $100,000 CAD from royalties also more than doubled in the same time frame.

Additionally, Spotify said that 28 percent of artists who generated over $10,000 CAD in royalties in 2022 self-released their music on Spotify, meaning they took most of the revenue they generated.

Spotify claims Canadian artists earn more from streams outside of Canada, with 91 percent of the royalties Spotify paid to Canadian artists coming from international listeners. Spotify compared itself to Canadian radio, noting that unlike how radio only plays to Canadians, Spotify can play to people all over the world.

Elsewhere, Spotify noted that music streaming services contributed nearly 80 percent of recorded music revenue generated by record labels in Canada in 2022, “driving overall industry growth of over 8%.” Spotify pointed out that SOCAN, the not-for-profit body representing Canadian songwriters and composers, saw record-high collections of $484 million CAD that year, marking 16 percent growth. Spotify says rightsholders like SOCAN “have never made more money” and claims that streaming services are “driving record growth across the music industry.”

Finally, Spotify noted that in other markets where it faced similar regulatory proposals to what’s now happening in Canada, it altered how it operates to “sustain its business model.” In other words, Spotify warned that rule changes in Canada would push the streamer to make changes, such as the aforementioned price hikes or cuts to expenses.

You can view Spotify’s full submission through the below embed or on the CRTC’s website, though the latter can be hard to find.