On Tuesday, the UK’s leading regulatory competition watchdog – the Competitions and Markets Authority (CMA) – concluded its independent study into the music streaming market in the country.
Amongst the CMA’s findings were that large-scale record labels are “[not] likely to be making significant excess profits that could be shared with creators”.
It also concluded that remuneration from streaming is an elite pursuit, with over 60% of streams in the UK being of music recorded by only the top 0.4% of artists.
The announcement followed a probe into the music business that came after a cross-Parliamentary committee made up of UK politicians called for a “complete reset” of music streaming in July last year after an inquiry into the economics of streaming.
An associated report recommended that the majors’ dominance of the UK recorded music industry should be referred to the UK’s competition watchdog – the Competitions and Markets Authority (CMA).
The CMA then launched a ‘market study’ into the power dynamics of the record business. The CMA’s final 165-page report on the matter was published in the UK on Tuesday (November 29).
Announcing the final report on Tuesday (November 29), Sarah Cardell, Interim CEO of the CMA, said that, “While this report marks the end of the CMA’s market study, which addresses the concerns previously posed about competition, we also hope the detailed and evidence-based picture we have been able to build of this relatively new sector will provide a basis that can be used by policymakers to consider whether additional action is needed to help creators.”
The outcome of the study has received a mixed response from various figures and organizations in the music industry.
Merck Mercuriadis, CEO and Founder of Hipgnosis Song Management, expressed disappointment at the result of the CMA’s report.
In a statement issued on Tuesday, Mercuriadis said: “Today’s CMA report has agreed with the DCMS Select Committee about the problems in the industry which result in Songwriters not being fairly paid for their work”.
He added: “The CMA have spelt out that most Songwriters and Artists do not have access to clear payment statements, the damage done by NDAs and acknowledge the conflict of interests between labels and publishers which results in revenues that go to publishers and Songwriters being held down – even though without Songwriters there would be no music industry.
“Yet rather than using the powers they have to fix the problems they identify, they have simply looked to pass the buck – a double whammy for Songwriters and Artists who are losing out on significant streaming income and now find the CMA unwilling to act.”
“Rather than using the powers they have to fix the problems they identify, they have simply looked to pass the buck – a double whammy for Songwriters and Artists who are losing out on significant streaming income and now find the CMA unwilling to act.”
Merck Mercuriadis, Hipgnosis
Mercuriadis continued: “The original work and recommendations of the DCMS Select Committee was excellent, we must now look to them, the IPO and the Government who must now pick up the baton dropped by the CMA.
“The Digital Markets Bill provides the perfect vehicle to solve these problems once and for all, ensure everyone is fairly paid for their contribution and ensure that UK is a centre for great music creation long into the future.”
“The report reinforces our view that the most effective way to enable even more artists to have a sustainable career in music is for labels to keep investing in talent and grow the market.”
BPI spokesperson
A spokesperson for the BPI, which represents independent and major record labels across the UK, welcomed what it called “the CMA’s objective, evidence-based report which confirms that the streaming market is competitive”.
The BPI added that the org believes the industry is “delivering fans accessible and affordable music and artists greater choice in an environment in which many more are succeeding and where artist and songwriter royalty rates have increased”.
Added the BPI spokesperson: “As the most definitive analysis of these issues to date, this report will help inform the work that we and industry are already doing in partnership with Government to further strengthen British music and ensure the UK remains competitive globally.
“The report reinforces our view that the most effective way to enable even more artists to have a sustainable career in music is for labels to keep investing in talent and grow the market.”
“While consumers have clearly benefited enormously from greater access to music at decreasing cost, we must take care to ensure music is not undervalued and that we balance that with the opportunity for more creators to benefit from a sustainable digital ecosystem.”
Paul Pacifico, AIM
The UK’s Association of Independent Music’s CEO Paul Pacifico, said: “While consumers have clearly benefited enormously from greater access to music at decreasing cost, we must take care to ensure music is not undervalued and that we balance that with the opportunity for more creators to benefit from a sustainable digital ecosystem.
“The independent sector has led the way in developing the innovative deal structures and business models that the CMA highlights as having been key in evolving music’s response to digital disruption and we need to ensure any measures the government may consider do not harm those essential entrepreneurs and investors in creative careers.
“Going forward, we must continue to work together as an industry on transparency and data to maximise the opportunity for our industry that the streaming inquiry represents.”Music Business Worldwide