music streaming apps

Music streaming market healthy for consumers despite artist complaints, CMA finds

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The concentration of power amongst a small handful of music streaming services such as Spotify and Apple Music is not currently a cause of concern for consumers, the Competition and Markets Authority (CMA) has said.

In its final report on the sector, it found that consumers have benefited from digitisation and competition between music streaming services.

Prices for consumers have fallen by more than 20 per cent in real terms between 2009 and 2021 – with many services also offering music streaming for free with ads.

The study found approximately 39 million monthly active users access music streaming services in the UK, streaming 138 billion times a year.

But the CMA has also heard concerns from 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.

Over 60 per cent of streams were of music recorded by the top 0.4 per cent of artists.

But the CMA said it was unlikely that the small number of streaming platforms was to blame and that other policy measures in order to be addressed to satisfy the concerns of artists.

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). This has 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 per cent 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 per cent in 2012 to 23.3 per cent in 2021. For songwriters, the share of revenues going to publishing rights has increased significantly from 8 per cent in 2008 to 15 per cent in 2021.

The CMA said it was unlikely that an intervention in the market would release additional money into the system to pay creators more.

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.”

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