The UK’s competition regulator the CMA has published its final report from its market study of music streaming – and by extension the music industry.
There are few surprises, given that the CMA published its interim verdict in July, deciding then not to expand its market study into a more detailed market investigation.
As then, the verdict is that any problems with music streaming, artist earnings and the structure of the music industry are not competition issues – and thus not for the CMA to take action on. In other words, it has identified problems, but thinks that they should be dealt with by the industry itself and/or politicians.
This is because the CMA partly looks at competition through a lens of how it impacts consumers, and given that music subscription prices “have fallen by more than 20% in real terms between 2009 and 2021”, it sees this as evidence of a competitive market.
Artists AND rightsholders aren’t happy about this real-terms decline, of course: it’s just that the CMA doesn’t see it as a competition concern.
The report does outline lots of concerns raised by artists about how streaming works for them, but concludes that these issues “are not being driven by the level of concentration of the recording market… neither record labels nor streaming services are likely to be making significant excess profits that could be shared with creators”.
“The issues concerning creators would not be addressed by measures intended to improve competition, but instead would need other policy measures in order to be addressed,” continues its announcement.
“The issues raised by creators could be further considered by government and policymakers as part of their ongoing work following the DCMS Select Committee’s inquiry into the economics of music streaming.”
We reported on the latest sessions from that inquiry earlier this month, including criticism of the transparency of the working groups set up by the government to continue that work, and also of the fact that there isn’t a group focusing on remuneration of artists.
No competition alarms and no regulation surprises, then. Over the course of today you can expect a rerun of the music industry’s reactions to the CMA’s interim report in July. The BPI and AIM will likely welcome the final report, and the MMF, FAC, Ivors Academy and Musicians’ Union will likely express disappointment.
Attention will shift back to those working groups, and to other channels through which the music streaming economy’s payout models might be changed. The original streaming inquiry saw the idea of ‘user-centric’ systems deprioritised in favour of demands for broadcast-style ‘equitable remuneration’.
In the latest inquiry sessions, we detected another potential shift: towards some kind of deal brokered within the music industry around minimum streaming royalties for musicians, along the lines of the model announced in France in May this year. The CMA’s final report, along with that of the streaming inquiry before it, will inform any such developments.