The Competition and Markets Authority (CMA) has published its
final report and 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.
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 measures intended to improve
competition, but instead would need other policy measures in
order to be addressed.
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 up 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.
The study does however 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.
Sarah Cardell, Interim CEO of the CMA, said:
Streaming has transformed how music fans access vast catalogues
of music, providing a valuable platform for artists to reach new
listeners quickly, and at a price for consumers that has declined
in real terms over the years.
However, we heard from many artists and songwriters across the UK
about how they struggle to make a decent living from these
services. These are understandable concerns, but our findings
show that these are not the result of ineffective competition -
and intervention by the CMA would not release more money into the
system that would help artists or songwriters.
While this report marks the end of the CMA’s market study, which
addresses the concerns previously posed about competition, we
also hope the detailed and evidence-based picture we have been
able to build of this relatively new sector will provide a basis
that can be used by policymakers to consider whether additional
action is needed to help creators.
Notes to editors:
- Approximately 39 million monthly active users access music
streaming services in the United Kingdom.
- New deals between majors and artists can vary significantly
reflecting for example the different potential financial rewards
and risks based on the characteristics of individual artists
(including by genre, potential, and stage of career). In
addition, we note that individual contractual terms should not be
viewed in isolation, as there may be trade-offs involved, for
instance between the royalty rate, minimum commitment period and
the amount of marketing support. However, we have found that on
average new deals between majors and artists have improved across
a number of these metrics between 2012 and 2021: see Table 2.8 of
the Final Report.
- The CMA has published its final report and decided to not
undertake further investigation into this market. View the report and other
documents via the case page.
- It is for policymakers to determine whether the split of
existing streaming revenues between music streaming services,
music companies, artists and songwriters is appropriate and fair,
and the CMA will share its final findings with government to help
inform that wider debate.