Spotify Raises Subscription Prices in France Following New Music Tax
Portfolio Pulse from Anusuya Lahiri
Spotify Technology SA (NYSE:SPOT) is raising its subscription fees in France in response to a new 1.2% music tax effective January 1, aimed at supporting the national music sector. This move comes after Spotify's criticism of the tax, which also affects other music streaming services like Apple Music and Google's YouTube Music. Despite a revenue increase in Q4, Spotify's earnings were below consensus. The company's strategy includes price adjustments rather than exiting the French market. Investors can access Spotify through Global X Social Media ETF (NASDAQ:SOCL) and ProShares On-Demand ETF (NYSE:OND).
March 07, 2024 | 2:18 pm
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NEUTRAL IMPACT
ProShares On-Demand ETF, holding Spotify shares, might be slightly impacted by Spotify's response to the new French music tax.
Given OND's investment in Spotify, the ETF could face slight indirect impacts from Spotify's decision to adjust subscription fees in France, though the overall effect on the ETF is expected to be minimal.
CONFIDENCE 70
IMPORTANCE 40
RELEVANCE 50
NEUTRAL IMPACT
Global X Social Media ETF, which includes Spotify, may see indirect impact from Spotify's pricing strategy changes in France.
As an ETF with exposure to Spotify, SOCL may experience minor indirect impacts due to Spotify's strategic pricing adjustments in France, though the effect is likely to be diluted across the ETF's diverse holdings.
CONFIDENCE 70
IMPORTANCE 40
RELEVANCE 50
NEUTRAL IMPACT
Spotify raises subscription fees in France in response to a new music tax, affecting its pricing strategy but not its market presence.
The introduction of a new tax in France has prompted Spotify to adjust its subscription fees, a move that could impact its short-term revenue but is unlikely to significantly affect its market position or long-term financial health.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 90