Music streaming report published
The CMA has concluded its independent study into the music streaming market.
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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.
- For media enquiries, contact the CMA press office on 020 3738 6460 or press@cma.gov.uk.