Following the referral by the government in September, the Competition & Markets Authority has formally launched its investigation into the UK music streaming market.
The Competition and Markets Authority’s (CMA) study will examine the music streaming market, from creator to consumer, paying particular attention to the roles played by record labels and music streaming services.
More than 80% of music consumption now comes from streaming services.
The BPI has called for a focus on growing the streaming market. But the launch of the CMA investigation will be welcomed by other trade bodies, including the Ivors Academy and the Musicians’ Union, who campaigned for it.
It follows the DCMS Committee report into the streaming market, which called on the government to investigate whether the major labels are too dominant in the streaming market.
As part of its assessment of how well the market is working for consumers, the CMA will consider whether innovation is being stifled and if any firms hold excessive power.
The competition watchdog launched an initial market study into streaming in October 2021 and will now go ahead with a full investigation. The CMA now welcomes comments from consumers, businesses and other interested parties based on the scope of its investigation by February 17.
“The CMA’s study will help build a deeper understanding of how firms in the market influence listeners’ choices and experiences,” said a statement. “While focusing on potential harm to consumers, the CMA 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.”
Andrea Coscelli, chief executive of the CMA, said: “Whether you’re into Bowie, Beethoven or Beyoncé, 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.”
“Streaming has led to an explosion of choice for music fans and creators in the UK," said a BPI spokesperson. "The BPI looks forward to engaging closely with the CMA to help it understand the changes that streaming has brought to the music market."
The FAC welcomed today’s launch of the investigation.
“Streaming has delivered a great deal of opportunity for our industry, for artists and for fans,” said FAC CEO David Martin. “The format now represents the sector's largest and fastest growing revenue stream. However, the foundations which streaming is built on are decades old and were not designed with the format in mind. It is therefore right that this work takes place to ensure that the infrastructure is fit for purpose in the modern era.
“Streaming is complex, therefore we support the wide-ranging approach set out in the CMA's Statement of Scope. It is imperative that the whole sector is properly understood in order to ensure that the UK music industry is the most fair, transparent and modern music industry in the world.”
Paul Craig, MMF chair, added: "Managers are at the epicentre of a fast-changing music business and, as a result, the MMF is perfectly positioned to contribute meaningfully to this incredibly important investigation. Our evidence will be based on the knowledge and expertise gained through our Dissecting The Digital Dollar initiative, which has forensically explored the streaming market from DSP licensing of master rights through to publishing and the many ongoing challenges with song royalties.
"If this investigation is to help deliver impactful action and reform, then I believe such a holistic approach will be absolutely crucial."
If the CMA finds problems, it will consider what action may be necessary.
Separately to the market study, an independent CMA panel is investigating Sony’s completed acquisition of AWAL.