UK Organization Launches Investigation of Music Streaming Services

Never in the history of recorded music have fans had such unbridled access to the content they love. Streaming services like Spotify, Apple Music, and YouTube are a boon for music fans and seemingly for artists. Streaming offers limitless opportunities for independent artists to reach new listeners. Are independent artists and labels getting their fair share of the pie when it comes to streaming services' success?

In the United Kingdom, the three majors (Universal Music, Warner Music, and Sony Music) make up a whopping 75% of the recorded music market, with thousands of independents together making the remaining 25%, according to the Association of Independent Music. With streaming now accounting for 80.6% of all music consumption in the UK, reported by the British Phonographic Industry (BPI), it’s no surprise that people are starting to look into the economics of music streaming and how effective competition is in this digital market.

This week the UK’s Competition and Markets Authority (CMA) officially confirmed they will move forward with a full market study into music streaming. This announcement follows a report that bashed major labels and recommended the UK government look into the economic impact they have on the music industry. The Digital Culture Media and Sport Committee (DCMS) responsible for the report is pushing for a “Complete reset” of the streaming business, alleging that the current model is unsustainable.

Over the past year, the DCMS has worked to tackle fundamental problems within the music industry and redress the balance of revenues for creators.

The Chair of the DCMS Committee, Julian Knight MP said, “While streaming has brought significant profits to the recorded music industry, the talent behind it – performers, songwriters, and composers are losing out. It’s time for the government to order an investigation by the CMA on the distortions and disparities we’ve uncovered.”

Although this market study is lax compared to other full-blown investigations, they have launched in the music industry recently, it will bear invaluable insights into music streaming. The CMA describes its market studies as a “key tool to identify – and, if appropriate, to consider how best to tackle – any competition and consumer issues.” 

Andrea Coscelli, Chief Executive of the CMA, announced the launch of the market study in a letter to the UK government. Coscelli wrote, “On 13 October, the [CMA] Board considered initial proposals to carry out a markets project on music streaming. They agreed that work in this area aligned with the CMA’s priortisation principles, and that it supported a strategic goal of the CMA to foster effective competition in digital markets, ensuring they operate in a way that promotes innovation and the consumer interest.” 

In response to the market study, the BPI has said it would comply with any inquiry.