A new report from the Competition and Markets Authority (CMA) has concluded that the concentration of power among the handful of music streaming platforms is not currently inhibiting artists – and that such platforms are unlikely to be earning high levels of excess profits.
This ruling comes despite longstanding criticism levelled at the streaming industry from artists who say it deprives them of a fair wage. The CMA have concluded, however, that ultimately the music streaming services are “currently delivering good outcomes for consumers”, with the monthly price of individual music streaming subscriptions having fallen by more than 20% in real terms between 2009 and 2021. The watchdog, which began investigating the music streaming market in January, says that whilst the sector is concentrated, this is not the main thing driving artist’s concern, adding that “it has long been the case in recorded music that only a very small minority of artists will achieve the highest level of success”.
And whilst 12 million streams a year could earn an artist around £12,000, there are less than 1% of artists who achieve that number of streams. In total, there were 138 billion streams of tracks in the UK last year.
Instead, it outlines that as a result of digitisation, the huge increase in the number of artists has led to a sense of unhealthy concentration, given that “consumer tastes tend to tip towards a relativity small number of artists being successful”.
In the report, the CMA also says it “has not found evidence of substantial and sustained excess profits by the majors”. It has therefore concluded that “a competition intervention… is unlikely to result in a material increase in revenues for artists.”
However, it’s added that “there remains a broader policy debate” about how current profits should be distributed but that this remains “a matter for Government and policymakers to determine.”
This ruling comes despite longstanding criticism levelled at the streaming industry from artists who say it deprives them of a fair wage. The CMA have concluded, however, that ultimately the music streaming services are “currently delivering good outcomes for consumers”, with the monthly price of individual music streaming subscriptions having fallen by more than 20% in real terms between 2009 and 2021. The watchdog, which began investigating the music streaming market in January, says that whilst the sector is concentrated, this is not the main thing driving artist’s concern, adding that “it has long been the case in recorded music that only a very small minority of artists will achieve the highest level of success”.
And whilst 12 million streams a year could earn an artist around £12,000, there are less than 1% of artists who achieve that number of streams. In total, there were 138 billion streams of tracks in the UK last year.
Instead, it outlines that as a result of digitisation, the huge increase in the number of artists has led to a sense of unhealthy concentration, given that “consumer tastes tend to tip towards a relativity small number of artists being successful”.
In the report, the CMA also says it “has not found evidence of substantial and sustained excess profits by the majors”. It has therefore concluded that “a competition intervention… is unlikely to result in a material increase in revenues for artists.”
However, it’s added that “there remains a broader policy debate” about how current profits should be distributed but that this remains “a matter for Government and policymakers to determine.”
Given the relative nuance of the report, there has been an equally nuanced response, with industry figures now saying the onus is on government to ensure a market for artists. Annabella Coldrick, Chief Executive of Music Managers Forum (MMF) and David Martin, CEO of Featured Artists Coalition (FAC), said in a joint statement: “The CMA report today focuses on how music streaming has benefited consumers and does not find that a competition intervention would be beneficial. “However, it acknowledges that other issues raised by artists, songwriters and managers, including fair remuneration and transparency, require a different kind of scalpel. We welcome the overriding conclusion that Government and policymakers should be driving forward reform. “This should put a renewed focus on the ongoing pan-industry work being led by the IPO, and ensure that this activity delivers tangible changes… If these outcomes fail to materialise, then the MMF, FAC and other creator-led organisations will call on the Government to intervene and fulfil their promise of legislative action.”Today the Competition and Markets Authority (‘CMA’) has published its music and streaming market study final report. Read MMF & FAC's statement on the report. pic.twitter.com/VBnGGgpXuu
— Music Managers Forum (@MMFUK) November 29, 2022
