Streaming now dominates the music industry, but it is delivering a good range of choices for consumers, an initial analysis by the competition watchdog says.
The Competition and Markets Authority (CMA) said 80% of recorded music was now listened to via streaming services, with more than 138 billion streams in the UK last year.
A report into the sector was launched earlier this year in response to an inquiry by the Digital, Culture, Media and Sport Committee into the economics of streaming.
We’ve published our initial analysis of the music and streaming market, showing:
🎶 in 2021, music recording revenues reached £1.1 billion
🎧 over 138 billion tracks were streamed
But for many artists it’s just as tough as it’s always been.
More 👉 https://t.co/EWjA5ywWcq pic.twitter.com/cT2HLlyXdD
— Competition & Markets Authority (@CMAgovUK) July 26, 2022
The report warned that “pitiful returns” from the current system are affecting the “entire creative ecosystem” and suggested some successful and critically acclaimed musicians are seeing “meagre returns” from their work.
But in an initial update on its work so far, the CMA said it had found that listeners had access to a wide range of music for a fixed monthly subscription fee and that these fees had fallen in real terms.
It said streaming had made it easier not only for listeners to access music, but also for artists to record and share it.
However, it noted that the music industry remained challenging for many creators, with a small number of high-profile artists enjoying most of the financial success while the majority do not make substantial earnings.
Technology is opening the door to many new artists to find an audience and music lovers can access a vast array of music, old and new, for prices that have fallen in real terms
The CMA said it believed that currently, the market was delivering good outcomes for customers, but said it would be concerned if innovation in the sector was decreased or the balance of power changed and record labels and streaming services began to make sustained and substantial excess profits.
“Streaming has transformed music. Technology is opening the door to many new artists to find an audience and music lovers can access a vast array of music, old and new, for prices that have fallen in real terms,” CMA interim chief executive Sarah Cardell said.
“But for many artists it is just as tough as it has always been, and many feel that they are not getting a fair deal.
“Our initial analysis shows that the outcomes for artists are not driven by issues to do with competition, such as sustained excessive profits.
“We are now keen to hear views on our initial findings which will help guide our thinking and inform our final report.”
In light of its early findings, the watchdog said it was minded to not launch a full investigation into the sector, but would take feedback on this proposal until August 19.
The CMA’s full market study is also ongoing, with a report still to be published.
The regulator said it would share its analysis with the Department for Digital, Culture, Media and Sport (DCMS), the Intellectual Property Office (IPO) and the Centre for Data Ethics and Innovation (CDEI) to help inform their work around strengthening artists’ rights.
Naomi Pohl, general secretary of the Musicians’ Union, said it was “disappointing” that the “competition issues” in the streaming market “will not be explored fully by a CMA investigation”.
“The CMA’s release today highlights what it sees as positive impacts of music streaming, but we feel they have failed to recognise the very serious problems posed to creators,” she said.
“In the long term, this could diminish the diversity of British music available to consumers as musicians are forced to seek other ways to make a living. We had particularly hoped that the CMA would deliver for songwriters who are currently receiving a small share of streaming revenue.
“Our fight to ‘Fix Streaming’ will continue, and we are still pushing for legislative reform to guarantee fair payments for our members.”