Competition watchdog to investigate fairness of UK streaming

The Competition and Markets Authority wants to foster healthier competition in the streaming service

The UK’s competition watchdog is set to launch a market study into the music streaming market to ascertain and ensure that it’s competitive.

It’s being launched to examine whether services such as Spotify give a fair deal to users, and comes after dramatic changes over the past decade in the way music is consumed.

Streaming now accounts for more than 80 per cent of all music listened to in the UK. The Competition and Markets Authority (CMA) said the music industry had evolved “almost beyond recognition”. A market study will help the regulator understand the shifts.

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CMA chief executive Andrea Coscelli said: “The UK has a love affair with music and is home to many of the world’s most popular artists. We want to do everything we can to ensure that this sector is competitive, thriving and works in the interests of music lovers” [via The Guardian].

“A market study will help us to understand these radical changes and build a view as to whether competition in this sector is working well or whether further action needs to be taken.”

The study has not formally launched – though it will “as soon as possible” – owing to a need to carry out further work to define its scope.

Spotify
Spotify (Picture: Alamy Stock Photo)

CMA is also pushing to increase competition in other digital markets, such as retail and tech companies. Currently it is investigating Amazon and Google over allegations that the companies have not acted enough to tackle fake reviews.

The digital markets unit was launched by CMA in April, which is operating in shadow form pending legislation that will provide it with its full powers.

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The news follows the UK government recently calling in a number of music industry leaders to help consider streaming reforms in response to the DCMS Committee’s report on the economics of streaming.

The Department for Digital, Culture, Media and Sport (DCMS) Commons Select Committee has been examining the business model for streaming since last year and whether or not the model is fair to songwriters and performers.

Over the summer, MPs stressed the need for a “complete reset” of the music industry to address the “pitiful returns” that artists receive. It came as part of a report from the Economics Of Music Streaming inquiry.

The inquiry saw the DCMS hear evidence from the likes of RadioheadElbow and Nadine Shah. In April, more than 150 artists including Paul McCartney and Kate Bush signed an open letter to Prime Minister Boris Johnson asking to help reform the streaming economy.

Tom Gray
Tom Gray

Earlier this year, artists spoke to NME about the need for a fundamental “shift in the way that business is done” to make payments fairer for musicians.

Tom Gray of Gomez, whose #BrokenRecord campaign helped spark the inquiry, said that he thought committee members “realised that there are all kinds of barriers of entry and problems with the playing field which means that even successful people aren’t making money”.

Annabbella Coldrick, CEO of the Music Managers Forum, agreed that the inquiry represented a positive step for fairness in the industry. However, she told NME that “it covered such broad territory that it’s not clear what recommendations are going to come out of this”.

Coldrick added that she wants the report to encourage industry-wide collaboration. “I’d love to see some really clear recommendations looking particularly at artist contracts and how artists – particularly those who signed deals pre-digital, are being remunerated.

“Artists do not want to be singled out and they’re worried about repercussions. Whenever I talk to the labels, they say they’ll happily re-negotiate if individuals come to them, but artists are scared to a lot of the time.”

In September the government revealed an action plan for the next 12 months, which will involve working alongside the music industry to form a contact group that will scrutinise the key issues.

Government action won’t be immediate. The debate about the future of the streaming economy will continue for at least another 12 months, following the publication of a government timetable.

In spring 2022, the government will update the music industry contact group and consider whether to take forward legislation in any areas. This review process will be repeated in the autumn of 2022.

Meanwhile, a new report by UK Music has revealed that one in three music industry jobs have been lost as a result of the coronavirus pandemic.

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