The Online Streaming Act is making life more unaffordable for Canadian’s as Spotify raises rates in response to it.
One of the predictions I (along with several others) had about the Online Streaming Act (formerly Bill C-11) is that platforms are either going to pull out of Canada altogether, or, pass those costs onto consumers. Supporters of the legislation called people like me crazy because this was about “Big Tech” “paying their fair share” and there’s no way that the platforms would do either. They contend that Canadian audiences are too valuable to leave the country. As for rate hikes, well… [insert vague hand gestures here].
Either way, supporters of the legislation and lawmakers ultimately chose to ignore the concerns and ram the legislation through the process anyway with pie in the sky predictions that it would lead to better prosperity for all and “saving” Canadian culture – even though there is no evidence that Canadian culture was ever really in danger or that everyone would be better off with this legislation. The problem here is that it is Canadians who pay the price for this head in sand approach.
For the most part, that has largely already been happening in pretty much every way imaginable. Earlier, the CRTC announced that they will be slapping platforms with a 5% tax and handing that revenue to those who just assumed that this whole internet fad would go away on its own and everyone will just naturally go back to watching television, listening to radio, and reading the newspaper eventually because reasons. Basically, people who clearly don’t deserve those revenues.
So far, though, we’ve seen Disney pull investments out of Canada, Netflix pulling sponsorships for development programs, smaller platforms openly contemplate leaving Canada altogether, and the entire music industry seeing their very existence flash before their eyes as they beg the government not to do this.
DiMA, for their part, warned that the legislation would worsen the affordability crisis, but many delusional supporters of the legislation dismissed all of this as little more than “Big Tech” using “bullying tactics” – a claim identical to when Meta predictably rolled out news link blocking. That move resulted in a trail of destruction within the news sector which led to a massive string of bankruptcies. Those that survived saw their web traffic get absolutely destroyed and found themselves wholly dependent on government bailouts just to stay afloat. This self inflicted situation is almost impossible to ignore, yet for supporters of the Online News Act (formerly Bill C-18), thy just jammed their fingers in their ears and continued to scream “bully tactics”.
Much like the Online News Act, the pain inflicted by the Online Streaming Act is going to be difficult to ignore – especially when you aren’t even following the debate. Recently, Spotify announced that they will be raising subscription rates in response to the Online Streaming Act. From iPhone in Canada:
Spotify has increased its prices in Canada across the board, following a similar move made in the U.S. this past June.
According to iPhone in Canada readers, emails sent out by Spotify notified customers of the price increase, which affects all Premium plans.
Spotify’s email we obtained says it is increasing the price of Premium Individual “so that we can continue to innovate on our product offerings and features.” The company says if you can always downgrade your plan or cancel if you don’t agree with the new price change.
Individual plans went up 15%, the student plan is up 5%, while duo is up 19% and family gets the biggest hike of 24%.
Why did Spotify increase its prices? Back in February, Spotify said Canada’s new Online Streaming Act would force it to increase prices in the country. The regulation from the CRTC says foreign online streaming services will need to give 5% of their Canadian revenues to support the Canadian film, TV and music. Welcome to Canada, everybody.
Platforms are largely going to be forced to decide how they choose to respond to the Online Streaming Act. The choice is largely either raise rates on Canadian’s or ditch Canada altogether. The decision goes beyond just the cost of doing business as well. Over top of the cost is the CRTC forcing the promotion of government certified speech. In a nutshell, the CRTC tells the platforms that they don’t care how they go about it, but the CRTC will dictate the outcomes of whatever recommendations users receive. If they don’t recommend enough government certified speech, that would open the platforms up to further liability. Some platforms simply do not have the catalogue to satisfy this unreasonable requirement. Even though they may be able to grin and bear with being forced to increase prices in Canada for consumers, they may not have the catalogue to comply with the laws anyway.
At any rate, this was entirely predictable. I figured Spotify would stick around thanks to their size, but that would compel them to raise rates to continue to remain in Canada. They warned that this would happen and now those warnings are becoming reality. While some out there might be largely ignoring the debate surrounding the Online Streaming Act, many of those people will end up feeling the sting of what’s coming down the pipeline. Everyone subscribed to Spotify learned that today.
(Via @PagMenzies)
