The CMA has concluded its independent study into the music streaming market.
The Competition and Markets Authority has published its final report following its investigation into music streaming services. It carried out the investigation following a report by the House of Commons Digital Culture Media and Sport Committee.
The CMA found that consumers have benefited from digitisation and competition between music streaming services. Prices for consumers have fallen by more than 20% in real terms between 2009 and 2021, with many services also offering music streaming for free with ads. The study found that there were around 39 million monthly listeners in the UK, streaming 138 billion times a year.
The CMA also heard concerns from creators - artists and songwriters - about how much they earn from streaming. With an increasing number of artists, tracks and streams, the money from streaming is shared more widely - with those that have the highest number of streams earning the most. The CMA found that over 60% of streams were of music recorded by only the top 0.4% of artists.
The CMA found that the concerns raised by artists are not being driven by the level of concentration of the recording market. Its analysis found that neither record labels nor streaming services are likely to be making significant excess profits that could be shared with creators. Consequently, the issues concerning creators would not be addressed by the measures intended to improve competition, but instead would need other policy measures.
The CMS says that digitisation has led to a major increase in the amount of music people have access to and to large increases in the number of artists releasing music (up from 200,000 in 2014 to 400,000 in 2020) partly by opening new direct routes to listeners. This has also meant that there is greater competition to reach listeners and for the associated streaming revenues. The study found that an artist could expect to earn around £12,000 from 12 million streams in the UK in 2021, but less than 1% of artists achieve that level of streams.
Some parts of the streaming market have improved for some creators in recent years, with the CMA finding a greater choice of deals with record labels available. Whilst individual deals can vary considerably, the report highlighted on average royalty rates in major deals with artists have increased steadily from 19.7% in 2012 to 23.3% in 2021. For songwriters, the share of revenues going to publishing rights has increased significantly from 8% in 2008 to 15% in 2021.
While the CMA understands the concerns from creators about the level of income many receive, the analysis in the study suggests it is unlikely that an intervention by the CMA would release additional money into the system to pay creators more.
However, the study does highlight that 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.
While this report marks the end of the CMA's market study, which addresses the concerns previously posed about competition, the CMA says that it hopes that its report will provide a basis that can be used by policy makers to consider whether additional action is needed to help creators.