Funding from the National Music Center fractures the sector

The next few months will be crucial for the future of the National Music Center (CNM), even if the Ministry of Culture has chosen out of prudence not to decide on its funding for 2023. This public establishment, called for by the sector for years to preserve musical diversity, and created the 1^er January 2020, will he already have to reduce the airfoil for lack of means? Inspired by the National Center for Cinema and the Moving Image, which involves the entire sector to defend French cinema, the CNM was launched without professionals agreeing on its funding. If the exceptional funds poured in by the State during the Covid-19 pandemic have concealed the problem, the differences of opinion are now coming to light.

The CNM currently relies on three resources: a tax on show ticketing which should bring in 30 million in 2023, against 35 million in 2019, given the uncertain recovery; a state budget of 26 million to cover the operating costs of the CNM (18 million) and contribute to cross-cutting support; and aid from collective rights management organizations, initially estimated at 7 million but reduced to 1.5 million by the health crisis and by European case law from 2020 which forces these organizations to retrocede 25 million per year to American rights holders in the detriment to local artistic projects.

A broad coalition

It is essentially the live performance, yet permanently affected by the pandemic, which puts the pot in the budget of the CNM. But the latter is far from having the annual 80 million necessary for its support missions for the entire sector.

Recorded music, in good shape, is a major absentee, denounces a vast coalition to demand a 1.5% tax on revenue from paid (Spotify, Apple, Amazon, Deezer, Qobuz) and free (Facebook, TikTok) streaming. , Youtube). There are show producers (Prodiss), non-profit structures of contemporary music (SMA), independent labels (UPFI) including the heavyweights Believe, Because, Wagram, collective management organizations (Sacem, etc.), publishers (CSDEM), classical music (Profedim, Fevis), performers… Unheard of.

Logical tax

Not enough to convince, however, the majors (Universal Music, Warner, Sony) represented by the SNEP, allied with the platforms, which refuse the tax on income from paid streaming and propose a taxation of video streaming. The reason ? They believe that recorded music has no room for maneuver because its VAT is 20%, against 5.5% for live performances.

The majors add that they already finance a circuit of support for its industry via the collective management organizations and that the governance to distribute aid fairly is not in place within the CNM.

“The majors are the first beneficiaries of streaming revenues, which come mainly from international artists and catalog funds, unlike French novelties, which bring in little”, retorts Pascal Nègre, long at the head of Universal Music. France. “This tax is logical: it is still not for the show, which is suffering, to finance recorded music while the streaming market is exploding and will double in five years”, he believes.

In view of the most listened to titles, “this contribution would in fact be borne three-quarters by the international repertoire, owned by the majors, and by the French catalog funds, the costs of which have already been amortized”, confirms Guilhem Cottet, general manager of the UPFI. “Some of my members, like Wagram – whose artist Orelsan is a streaming success – would also be taxed, like the majors, but it seems virtuous to them to finance the production of new French releases,” he adds.

Potential of 21 million

In addition, since subscription music platforms pay 70% of their income to music rights holders each year, this already modest tax would only be calculated on the remaining 30%, which would reduce its impact, calculate its defenders. Not the sea to drink for some, but a lot for others: on a turnover of 1.4 billion euros, this contribution would generate 21 million for the CNM.

Proponents of this tax believe that the consumer has little risk of having their subscription re-evaluated because the platforms include in their contracts a clause passing on any new tax to the royalties paid by the labels. “We are just asking for a gesture of mutualisation because our economies are interconnected”, insists Aurélien Binder, the general manager of Fimalac Entertainment, producer of shows and operator of rooms.

Assistance to contributors

In any case, in the event that the show would be the only one to finance the CNM, there is no question of redistributing aid to recorded music where the concentration around American and Chinese multinationals has increased with the takeover of catalogs. However, with the exception of tax credits, some of which will come to an end, there is no permanent mechanism to support phonographic production.

“The law provides that the CNM supports music, from writing to broadcasting. If we do not have the means, the transversal missions will suffer, we will not be able to help the links which will not contribute, ”warns the president of the CNM, Jean-Philippe Thiellay.

“However, aid for creation stimulates investment by VSEs and SMEs and risk-taking towards less profitable aesthetics, threatened with gradual disappearance: classical, jazz, young French song. Remember that the independents do 80% of phono production, with the majors focusing more on distribution and marketing,” worries Guilhem Cottet. “If we can no longer project ourselves in the long term, the diversity and international influence of our artists will suffer,” points out Romain Vivien, general manager of Believe France.

However, the context plays in favor of the status quo. Bruno Le Maire having declared himself opposed to any additional tax, it is unlikely that he will agree to introduce a contribution on recorded music. The Minister of Culture, in presenting her budget, wanted to reassure: “There is no subject before 2024 and we must give ourselves time to reflect on a complex reform. »