The Competition & Markets Authority is to move ahead with a market study into music streaming.
The DCMS Committee's report into the economics of streaming called for the CMA to launch the investigation into streaming and the power of the majors. The government then referred this to the competition regulator for consideration.
Today the CMA confirmed that it will launch an investigation.
Following discussion by the CMA board, the regulator will carry out work to consider and develop the final scope of the market study, before formally launching it as soon as possible.
The CMA has written to the government and the DCMS Committee to outline its intended next steps.
Andrea Coscelli, chief executive of the CMA, said: "The UK has a love affair with music and is home to many of the world’s most popular artists. We want to do everything we can to ensure that this sector is competitive, thriving and works in the interests of music lovers.
"Over the past decade, the music industry has evolved almost beyond recognition, with streaming now accounting for more than 80% of all music listened to in this country. A market study will help us to understand these radical changes and build a view as to whether competition in this sector is working well or whether further action needs to be taken."
DCMS Committee Chair Julian Knight MP said: “We welcome the decision by the CMA to urgently carry out a competition inquiry into music streaming and the dominance of the major music groups. That the CMA has made this a priority is a big result for the DCMS Committee, endorsing one of the key recommendations of our inquiry into music streaming.
“Our investigation exposed fundamental problems within the structure of the music industry itself. This action marks a key step forward.”
“The BPI welcomes the CMA's study into the music streaming market," said a spokesperson for the trade body. "We look forward to seeing the scope of the project in due course and engaging with the CMA to inform its work.”
AIM CEO Paul Pacifico said: “AIM stands for an inclusive and open market that offers genuine opportunity for all. Concerns around hyper-concentration of power by the majors who control 75% of the market and the dynamic between music and technology companies are some of the topics that could well benefit from this CMA market study, which could help build understanding and confidence for all stakeholders in music, from creators to consumers.”
Horace Trubridge, general secretary of the Musicians’ Union, said: “We are delighted that the CMA is following through with proposals to carry out a market study into music streaming. This shows a fundamental willingness and interest from government and regulators to tackle the pervasive issues around the major labels' current market domination. Now is the time for the government to further commit to supporting reforms for equitable remuneration for musicians, to ensure that our fantastic musicians are fairly and properly rewarded for their work.”
Naomi Pohl, deputy secretary general of the Musicians’ Union, said: “It is great news that the domination of the major music groups in the streaming market will be subject to scrutiny. This marks a crucial step towards creating a fairer and more transparent UK music landscape, particularly through addressing what the DCMS Select Committee’s report described as ‘deep concerns’ around the dominance of the major labels. It feels like real progress is being made to fix streaming, with some of the Select Committee's key recommendations already being taken forward. There are many issues with the economics of music streaming and it isn't a fair playing field for creators and performers at present but we are hopeful of meaningful change. Many thanks to the CMA for their encouraging announcement today.”
Graham Davies, CEO of The Ivors Academy, said: “The DCMS Select Committee, the UK government and now the UK Competition and Markets Authority have listened to the concerns of music creators. They accept it is time to look into the structure, activities and market power of the major music groups. These groups control the majority of the recording and publishing markets. They do this without any proper regulation, control or separation of interests. The consumer wants a healthy pipeline of diverse music talent where fair payment is given to the creators they listen to. The CMA study will be an important step on this path.”
Crispin Hunt, chair of The Ivors Academy, said: “The pandemic has allowed music creators, consumers, politicians and now regulators to look afresh at the way our industry operates. The power of the major music groups is nothing new, but the willingness to question their size, practice and dominance is. The music market has evolved, but music’s economic models have not. Consolidation is not the answer. Polycentrism, not oligopoly, will best deliver a flourishing varied and functioning music market and ecosystem: a music market that encourages competition, broadens choice, stimulates innovation and enables sustainable growth and careers. Is music streaming a ‘winner takes all’ environment in its nature... or by design? A CMA study will hopefully tell us.”
Tom Gray, founder of the #BrokenRecord Campaign, said: “The music market has desperately needed investigation for over a generation. Access and value for creators is dangerously low. To say this study is welcome is a huge understatement. The future for British music-makers is a little brighter today.”
Market studies are used by the CMA to identify and tackle any competition and consumer issues.
Separately to the proposed market study, an independent CMA panel is investigating Sony’s completed acquisition of AWAL.