UK competition watchdog the CMA is launching a market study focusing on music streaming. If it’s led by last year’s parliamentary inquiry into streaming economics, the emphasis may be more on the business practices of labels than of streaming services.
However, indie label body Impala is hoping to nudge it towards the latter. In its submission to the CMA, reported on by several outlets this morning, Impala encouraged the watchdog to scrutinise the DSPs – and one in particular.
“Some music services like Spotify are launching initiatives to reduce royalties for plays or privileged treatment in algorithms or other features, which are similar to payola and have no legitimate place in improving viability and opportunity for creators,” wrote Impala.
“As a consequence, the real price of music has decreased and, to date, attempts to promote real change in how services charge for music and then allocate it have not been taken on board.”
The timing is no coincidence, since the CMA is currently “developing the final scope of this market study” (according to its spokesperson, talking to the City AM newspaper). Impala’s intervention is its attempt to ensure that this scope includes Spotify’s ‘Discovery Mode’ – the initiative referred to above.
Announced in November 2020, Discovery Mode has since taken heat from some artists; been described as “profound disrespect to the community of creators who struggle to make a living” by songwriters and composers body ECSA; and elicited some pointed questions from US politicians.
For its part, Spotify has highlighted support for the initiative from distributors Believe, DistroKid and TuneCore; published a case study of how one independent artist benefitted from switching the feature on; and promised those politicians that criticism of its plans “largely rest on a misunderstanding of the way in which Discovery Mode works”.
The CMA will have the final decision whether to dig in to this specific initiative, as well as the wider “real price of music” debate. With a label body pointing the finger at DSPs before the study officially launches, once it actually does get underway, we could be in for some spicy submissions from the various parties.
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