Major UK record labels could face industry competition inquiry

YouTube's dominance over the music streaming market has also been called into question

Major record labels in the UK could face an inquiry into whether they are dominating the music market.

As reported by the BBC, the government has asked the Competition and Markets Authority (CMA) to consider an investigation into the top three labels: Sony, Warner and Universal Music.

It has also suggested that the CMA looks into YouTube’s dominance over the music streaming market.

Advertisement

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 Digital, Culture, Media and Sport (DCMS) Select Committee had previously heard evidence from the likes of Radiohead, Elbow, Nadine Shah. Back in April, over 150 artists – including Paul McCartney and Kate Bushsigned an open letter to Prime Minister Boris Johnson asking to help reform the streaming economy.

Julian Knight, who is the chair of the DCMS, has now said that although streaming sites “brought significant profits to the recorded-music industry, the talent behind it – performers, songwriters and composers – are losing out”.

Radiohead's Ed O'Brien
Radiohead’s Ed O’Brien. CREDIT: Press

Knight has urged the CMA to look into the commercial power held by major labels, claiming that they receive beneficial treatment over indie labels and acts who self-release their material. This includes prominence on popular playlists and in storefronts.

The government said in an official response that while there “may be value” in such an investigation, it was ultimately up to the CMA to decide whether to go forward with the inquiry.

Advertisement

The statement added: “We have written to the CMA on this recommendation.”

The British Phonographic Industry (BPI) said it would comply, “should the CMA conduct a study”.

“We look forward to detailing labels’ role in supercharging the careers of British talent within a complex and dynamic ecosystem,” it continued.

Spotify, Apple Music, Deezer
Spotify, Apple Music, and Deezer apps CREDIT: Getty

Findings from the DCMS Committee, which were released back in July, saw MPs call for new legislation that “enshrines in law [acts’] rights to a fair share of the earnings” to address the inequality in payments received by artists.

Recommendations from the inquiry also included calls for the government to legislate so that performers “enjoy the right to equitable remuneration for streaming income”.

While the government said that the inquiry had provided “invaluable insights” into the streaming model, it said “there is still work to be done to understand the problems musicians are facing”.

The government response also said it wanted to “explore ways in which new and upcoming songwriters [and] composers” could receive fairer pay. This would including working with Credits Due – a new initiative founded by ABBA’s Björn Ulvaeus, which aims to tackle issues surrounding music royalties and metadata.

ABBA’s Björn Ulvaeus. CREDIT: Getty

“It is testimony to all those who gave evidence to our inquiry that the government has acknowledged our report as a ‘key moment’ for the music industry,” Knight said of the government’s response.

“Within days we expect to see the government’s own research published into the pitiful earning of creators in this digital age and hope it will corroborate what artists and musicians told us.”

He added: “We will be monitoring the outcome and what tangible steps the government pledges to take to redress this unfairness and reward the talent behind the music.”

Following the DCMS findings being published in July, Tim Burgess told NME: “We’ve known for years that so much of the income generated by streaming doesn’t reach the artists, through campaigns like #BrokenReCord we’ve learned that lots of the funds reach major labels but are syphoned away from the people that make the music that makes money.

“Archaic contracts mean that artists are unpaid for the longest time.”

Advertisement
Advertisement