In an update document on its music and streaming market research, the Competition and Markets Authority (CMA) initially found that:
- Streaming has transformed the music industry. Revenue from recorded music reached £1.1 billion in 2021, with 80% of recorded music now being listened to via streaming services. Last year there were over 138 billion music streams in the UK.
- Listeners have access to a wide selection of music for a fixed monthly subscription. These costs have decreased in real terms.
- Access to a wide range of music – old and new – means that older songs can more easily find new life and find new audiences. 86% of streams in 2021 were for music that was over a year old.
- Digitization has made it easier than ever for many artists to record and share music and find an audience. The number of artists releasing music doubled between 2014 and 2020, from around 200,000 to 400,000.
- As more artists release music and have more choice than ever in how they release their work, the market remains tough for many creators. Industry revenues are broadly stable, but more and more artists are releasing more music. As has always been the case, while a small number of top artists enjoy huge financial success, the vast majority do not earn substantial incomes.
- Against a backdrop of 138 billion global streams in 2021, CMA analysis found that one million streams per month could earn an artist around £12,000 per year.
- The 3 major record labels play a key role in the recorded music business. The evidence the CMA has seen does not show that this concentrated market is currently causing harm to consumers or fueling the concerns raised by artists. Neither labels nor streaming services appear to be making sustainable excess profits.
Overall, the CMA’s initial analysis indicates that the market is performing well for consumers. However, the CMA would be concerned if the market changes in a way that could harm the interests of consumers. For example, he would be concerned if innovation in the industry wanes, or if the balance of power shifts and labels and streaming services begin to make sustained and substantial excess profits.
CMA will also continue to support the work of the Intellectual Property Office (IPO) with industry to improve transparency of information.
Sarah Cardell, Acting Executive Director of the CMA, said:
Streaming has transformed music. Technology opens the door for many new artists to find an audience and music lovers can access a huge range of music, old and new, at prices that have come down in real terms.
But for many artists, it’s as difficult as it always has been, and many feel they’re not getting a fair deal. Our initial analysis shows that outcomes for artists are not driven by competitive issues, such as sustained excessive profits.
We now look forward to hearing views on our initial findings that will help guide our thinking and inform our final report.
CMA market research is ongoing. In light of its initial findings, the CMA is consulting on its proposal not to refer to a market investigation and welcomes further evidence or comment on this by August 19.
The CMA will share its analysis with the Department for Digital, Culture, Media and Sport (DCMS), the IPO and the Center for Data Ethics and Innovation (CDEI) to help inform their work examining whether artists’ rights can be strengthened for music streaming. .
For more information, visit the Music Streaming Market Research webpage.
Notes to editors
- For media enquiries, contact the CMA Press Office on 020 3738 6460 or [email protected]
- The CMA is the main UK competition and consumer protection authority. It is an independent, non-departmental government department responsible for investigating mergers, markets and regulated industries and enforcing competition and consumer law.
- Market research examines why particular markets may not be performing well for consumers. They can achieve a range of outcomes, including: a) making recommendations to government to change regulations or public policies; b) encourage market companies to self-regulate; (c) take consumer or competition enforcement action against businesses; d) make a referral for further market investigation (phase 2); (e) “good state of health”.
- For more information on the CMA’s approach to market research, see Market Research and Surveys – Guidance on the CMA’s Approach: Guidance from the CMA3.
- The statutory deadline for publication of the CMA market research report is 26 January 2023.
- Sarah Cardell assumed her new role as interim CEO of the CMA on July 26, 2022.