LONDON (CelebrityAccess) – Following the release of a report on the economics of music streaming, the UK government has asked the National Markets and Competition Authority to launch a review of the leading music streaming houses records and their impact on the music streaming business. .
The release of the report, which the UK government has called a “key moment for the music industry” follows the release of the report by the Culture Select Committee, which conducted a six-month study of the streaming market and its impacts on songwriters and artists.
Committee Chairman Julian Knight acknowledged that while streaming has generated “significant profits for the recorded music industry, the talent behind it – performers, songwriters and songwriters – are losing out.”
The committee asked the CMA to examine the influence that majors can exert on the system and asked the watchdog of the markets to consider the power of YouTube in the streaming market.
In a statement provided to the BBC, the British Phonographic Industry (BPI), which represents the UK recorded music industry, said its members will comply with any investigation launched by the CMA.
“If the CMA is conducting a study, we are eager to detail the role of labels in boosting the careers of UK talent within a complex and dynamic ecosystem,” he said.
In a statement provided to CelebrityAccess, IMPALA Executive Chairman Helen Smith said:
Having a competitive, open and responsible music market is vital. As a sector, we have raised concerns about increasing consolidation for decades. We have repeatedly stressed the need to put in place structural and corrective measures to deal with the consequences and ensure that the music market is competitive and open. IMPALA welcomes the CMA’s investigation into UK music market concentration. When it comes to streaming, we have key recommendations for labels as well as services in our 10-point streaming plan. We also looked at equitable compensation and concluded that it is not fair. In our opinion, this would be damaging for emerging artists and would not really introduce effective change.
The job of our members as independent music companies is to maximize the income of our artists and help diverse artists break through. Our members are more than ever inundated with artists looking for partner labels and we need the right conditions to face these artists. Our vision is of a market full of opportunities and market access is crucial.
The digital music market is of course fundamental in today’s ecosystem. We also raised the issue of competition in this sector and the power of a handful of global digital players. With being indispensable business partners comes responsibilities. Our 10-point plan for streaming reform points to many of these issues. We believe, for example, that more needs to be done to maximize artists’ income and stimulate diversity.
We understand that this will be the mandate of the new Digital Markets unit within the CMA. We urge a clear investigation into these questions, including why the music market today is still only 35% of its peak when adjusted for inflation, why real music subscription prices have in fact decreased, the impact of key factors exerting downward pressure on prices such as the value gap, an assessment of royalty reduction programs such as Spotify’s discovery mode and whether the very structure of the digital market and key players is in the public interest. We also urge the UK government to pursue a legislative response on the value gap and not to be left behind by the rest of Europe.
We look forward to working with the CMA, the Digital Markets Unit and the UK government on all of these issues.