For years, artists have lamented that music streaming only serves the interests of large music companies and online platforms. Regulators are now listening
Independent artists are losing out: The UK’s Competition and Markets Authority (CMA) announced that it will carry out a market study into music streaming services. The initiative is in response to a recommendation of the DCMS Committee of the House of Commons, which completed an inquiry into the economics of music streaming in July. The inquiry found that, while streaming services mean consumers’ access to music is now cheaper, more personalised and more readily available than ever – their short-term pricing structure puts the music industry at risk in the long-term. The DCMS committee confirmed the concerns that large parts of the industry had voiced for years, and highlighted competition problems that the CMA will now investigate in more detail. These markets are seeing the increasing dominance of certain platforms (YouTube in particular) and of major music companies, to the detriment of artists whose revenues from streaming are often negligible.
What will be the focus of the study? The CMA has not yet set out the detailed scope of its study, though it is likely to focus on the concerns highlighted by the DCMS Committee’s report. The three major music companies (Sony, Universal, Warner) make up 75% of the UK recording market, and have significantly stronger power compared to independent labels, including when negotiating with streaming services. The market could be further distorted by the fact that these companies are acquiring equity stakes in services such as Spotify. The CMA will also likely examine YouTube’s ability to exploit copyright ‘safe harbours’ as a platform hosting user-generated content.
The CMA will not intervene directly: As is the case with market studies, the CMA could take up to a year to complete its work. Depending on its findings, it will then make recommendations for the Government, but won’t introduce legally binding remedies – that could only happen following a market investigation led by a group of independent panel members. In this respect, it will differ significantly from the investigation that the European Commission is carrying out in the same market, to determine whether Apple Music is engaging in anticompetitive behaviour against Spotify.
Source: https://www.gov.uk/government/news/cma-plans-probe-into-music-streaming-market
