The UK’s competition watchdog has launched a probe into music streaming, it has announced.
The Competition and Markets Authority (CMA) will be asking if the market is “working well for music lovers”, as part of a study launched on Thursday, the regulator said.
According to figures released by trade association the British Phonographic Industry (BPI) in January, the UK’s music consumption rose for a seventh successive year in 2021, with streaming accounting for 83% of the total.
Today we announce that UK recorded music consumption rose 2.5% in 2021, with 159 million albums or their equivalent streamed or purchased.
— BPI (@bpi_music) January 4, 2022
Ministers referred the case to the CMA following an inquiry by the Digital, Culture, Media and Sport Committee into the economics of streaming.
The report warned that “pitiful returns” from the current system are affecting the “entire creative ecosystem” and suggested some successful and critically acclaimed musicians are seeing “meagre returns” from their work.
It also raised “deep concerns” about the position of the major music companies in the market.
Major record labels Sony Music, Warner Music and Universal Music appeared before MPs during the sessions, while tech giants Spotify, Amazon, Apple and YouTube also gave evidence.
🎧 (1/3) We’ve launched our study into the #music streaming market to see whether it’s working for music lovers.#MusicStreaming is now more popular in the UK than CDs and #vinyl, accounting for more than 80% of all music consumption.
— Competition & Markets Authority (@CMAgovUK) January 27, 2022
In its announcement, the CMA said its study will be examining the music streaming market from “creator to consumer”, including a focus on the roles played by record labels and music streaming services.
It added that it will “also assess whether any lack of competition between music companies could affect the musicians, singers and songwriters whose interests are intertwined with those of music lovers” and said if it “finds problems” it will consider “what action may be necessary”.
Chief executive Andrea Coscelli said: “Whether you’re into Bowie, Beethoven or Beyonce, most of us now choose to stream our favourite music.
“A vibrant and competitive music streaming market not only serves the interests of fans and creators but helps support a diverse and dynamic sector, which is of significant cultural and economic value to the UK.
“As we examine this complex market, our thinking and conclusions will be guided by the evidence we receive.”
In a letter to Mr Coscelli, culture minister Caroline Dinenage and parliamentary under secretary of state for science, research and innovation Amanda Solloway said any Government action should be led by “robust evidence”.
“The Government’s view is that transparency and fairness in the global streaming environment are key,” they said.
“It wants to encourage innovation in the market, to help foster diversity of music genres and consumer choice, and is acutely aware of the pressures on music creators.
“However, this is a complex area, so it is vitally important that any action by the Government be led by robust evidence.”
In December, MPs debated the Copyright (Rights and Remuneration of Musicians) Bill, which is sponsored by Cardiff West Labour MP Kevin Brennan.
The Bill, which is still going through the House of Commons, would introduce a right to “equitable remuneration” for streaming income – where performers have a right to receive a share without reference to their label contracts.
It would also give musicians more of a say over how their music is used, including rights to reclaim ownership from record companies after 20 years.
In a statement, the BPI said: “Streaming has led to an explosion of choice for music fans and creators in the UK.
“The BPI looks forward to engaging closely with the CMA to help it understand the changes that streaming has brought to the music market.“