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Posted on December 7, 2022 | By Barbara Drews

CMA Rules In Favor Of Record Labels & Streaming Services

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UK Watchdog Shuts Down Allegations Once & For All!

Amid claims that big record labels and music streaming services such as Spotify hold excessive power in the industry, UK Watchdog, the British consumer investigative journalism program, launched an in-depth investigation into the music streaming market to determine whether the claims were true. But it turns out that the system, in large part, is surprisingly fair both to listeners and musicians. 

Before initiating their research, the Competition and Markets Authority (CMA) had announced that their main focus will be:

“To assess whether any lack of competition between music companies could affect the musicians, singers, and songwriters whose interests are intertwined with those of music lovers.”

Chief Executive of CMA, Andrea Coscelli said that

As we examine this complex market, our thinking and conclusions will be guided by the evidence we receive. If the CMA finds problems, it will consider what action may be necessary.”

Looking into the streaming industry from a creator-to-consumer perspective, CMA promised to see:

“Whether innovation is being stifled and if firms hold excessive power.”  

Well, now that the results are in, many artists will be disappointed to find out that there is no power exploitation and the influence of record labels and music streaming services on the market cannot be regulated. The UK’s competition watchdog claims that no real harm can be directly correlated, despite the appeal of some industry professionals.

In the final issued report, CMA explained,

We have found that it is unlikely that the outcomes that concern many stakeholders are primarily driven by competition. Consequently, it is unlikely that a competition intervention would improve outcomes overall, and release more money in the system to pay creators more.”

Despite The Apparent Challenges, The Final Verdict Is As Follows:

  • Streaming services have benefited music fans who have free access to songs and are paying less for Spotify, Apple Music, and Amazon.
  • Industry giants (Universal, Warner, and Song) that control most of the market share aren’t “likely to be making significant excess profits that could be shared with creators.”
  • Despite the increase of Royalty rates in deals, many musicians still struggle to make an income from streaming services.

According to CMA interim chief executive, Sarah Cardell,

“Streaming has transformed how music fans access vast catalogs 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.”

“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. Intervention by the CMA would not release more money into the system that would help artists or songwriters.”

To read more stories like this go to  MPT Blog. You can also follow MusicPromoToday for more news about the music industry.


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