UK competition watchdog publishes music streaming report and found that consumers have benefited from digitisation and competition between music streaming services. The Competition and Markets Authority (CMA) found that 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 Bn times a year.
CMA Music Streaming Report main findings
- With an increasing number of artists, tracks and streams, the money from streaming is shared more widely. Those with the highest number of streams earned the most. 60% of streams were of music recorded by only the top 0.4% of artists.
- Concerns raised by artists 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. 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 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.
The publication of the report marks the end of the CMA’s market study and the full report and supporting documents can be found here.
