The UK government has called on the competition watchdog to overhaul the structure of the UK music industry, fearing the benefits of the streaming boom could be passed on to musicians.
The Digital, Culture, Media and Sports Department wrote to the Competition and Markets Authority asking it to carry out a market study. It follows a recommendation from a committee of MPs that called for a “full reset” to improve “pitiful” payments to musicians.
The committee raised concerns about the dominance of the big labels – Universal Music, Warner Music and Sony Music – and whether the deals made between these labels and streaming services such as Spotify have been detrimental to musicians.
Julian Knight, chairman of the DCMS committee which looked at the industry, welcomed the decision. “Our report exposed the unassailable position of these [major labels] reached. We have provided proof of our deep concern that their dominance is distorting the market, ”he said.
The CMA said its board “will carefully consider this important recommendation.” He said his options included a one-year market study that would rely on the government to implement its recommendations or a full investigation, which would take 18 months and could apply legally binding remedies if competition concerns were to arise. discovered.
The BPI, the professional body for the music industry, said competition in the UK music industry remains “fierce” and that he would be happy to work with the CMA. “Supporting the growth of the market and keeping the dynamism, investment and innovation of British music alive is the most effective way to ensure that even more artists benefit,” he said.
The government has stopped short of recommending legislative action or passing the MP’s key recommendation to change the way streaming music is categorized. In July, the committee argued that streaming songs should be treated as if the song was on air and not as a CD sale. This would mean that the royalties would be shared among the musicians who performed the song rather than going to the record company.
The government has said it will release a new report on the economics of the streaming industry commissioned by the Intellectual Property Office in a few days, but has refrained from committing to intervene in the market.
“More focused research and evidence is needed before the government can decide what action to take,” he said.
The UK competition regulator has been active in the music business in recent weeks. He opened a full investigation into a recent music deal after warning that Sony Music’s $ 430 million acquisition of independent company AWAL in Kobalt could stifle competition and lead to worse conditions for artists. He said Sony’s investigation, which is slated to end in March, would be relevant to its view of the overall music market.
In a September 7 update following the regulator’s Phase 1 investigation into the deal, the regulator said that “the UK market for wholesale digital distribution of recorded music is currently highly concentrated. “. The CMA said Sony, Universal and Warner dominated the industry, noting that Sony would have benefited from competition with a disruptive company like AWAL.
Universal Music is listed on Tuesday in Amsterdam. After a 40% increase in early trading, the world’s largest music company was valued at 45 billion euros.