Spotify Price Increase: Music Streaming Platform's Proposed Price Hike May Lead to Piracy

Sieeka Khan, Tech Times 25 February 2021, 05:02 am

Spotify is planning to increase its monthly subscription fee, and MPs fear that this could lead to an increase in piracy.

The music industry is known to increase its prices every couple of years as it helps artists and songwriters get the money they deserve in exchange for their service.

However, music streaming service Spotify told MPs that it has plans of increasing its monthly subscription fee of $10 a month. Spotify has not increased its service in 10 years, according to Tech Crunch.

Spotify increase may encourage piracy

If music becomes too expensive, chief legal officer Horacio Gutierrez warned that it could increase online piracy as people may think it is the only way they can enjoy the content without having to spend too much.

Gutierrez gave evidence to a digital, culture, media, and sport select committee inquiry into online streaming economics. In 2020, it was created to investigate whether artists are being paid fairly by streaming services like Amazon Music, Apple Music, and Spotify.

Also Read: New Spotify Patent Shows It Could Soon Suggest Music by Listening to Your Accent and More

On Feb. 23, all three companies appeared before MPs, but much of the discussion centered around their biggest rival, YouTube.

Paying less

Elena Segal from Apple Music pointed out that it was difficult for streaming services to compete with the music available on YouTube. She said that it is an un-level playing field as people can listen to music on YouTube for free.

YouTube is protected by the safe harbor laws that prevent them from being attacked by legal claims when users upload materials on the platform that are copyrighted. That means YouTube does not need licenses for the music that is uploaded on the site.

YouTube is the reason why streaming services can't increase their prices, as users can just switch platforms. Also, not all songs are available on the streaming services, but all of them can be found on YouTube, according to Buzz.ie.

The future of music

This is not the first time that the DCMS inquiry has heard accusations against Google-owned YouTube. The company was once accused of making a fortune from other people's work, according to BBC.

The accusation was made by committee chair Julian Knight MP after being told that YouTube paid £35 million to UK record labels in 2020, half of what they actually earned from selling vinyl records. By contrast, Spotify got £474 million for the UK music industry in 2020.

However, the director of government affairs and public policy at YouTube, Katherine Oyama, said that the company's payments were on a par with Spotify and other music streaming platforms.

In February, Oyama told MPs that YouTube had paid $3 billion or £2.1billion to the global music industry back in 2019. She said that record labels were pointing their fingers at YouTube to alleviate difficult questions about their own industry.

Oyama also called for transparency on how the money is being paid to the industry was divided it up before distributing it to artists and songwriters.

Much of the discussion has centered around whether songwriters and artists receive a fair share of the country's total generated income when their music is played online. The process is still being investigated.