“Our fight to Fix Streaming will continue, and we are still pushing for legislative reform to guarantee fair payments for our members". Image credit: Jonathan Stewart.
In January, the Competition and Markets Authority (CMA) published a market study notice in relation to music streaming. Over the subsequent six months, they have received submissions on the potential scope of the study and also met with key stakeholders to discuss competition issues within the streaming market.
Now, the CMA has announced that they would not be proceeding with a full investigation. This is hugely disappointing for the MU. Union members are encouraged to look out for further information, including actions and next steps for the Fix Streaming campaign, in the next few days.
Recognising non-competition related issues with streaming
While the CMA are focused on consumers who they feel are served well by the music streaming market, the CMA update highlights that there are non-competition related issues with music streaming such as a lack of transparency around royalty payments.
These issues will be taken up through ongoing Government, Intellectual Property Office and music industry contact and working groups. These meetings were attended by former MU General Secretary Horace Trubridge previously and are now attended by current MU General Secretary Naomi Pohl on behalf of the union.
The impact of major label dominance of the market
The MU made a detailed written submission to the CMA, and MU General Secretary Naomi Pohl met with CMA representatives to outline the Union's take on the streaming market.
The big issues from the Union's perspective, in competition terms, are the major labels' dominance of the market and suppression of the value of music publishing (and therefore royalties to songwriters), and pricing remaining static for so long.
The MU’s submission highlighted that music streaming revenue is currently divided roughly as follows:
- 25-35% streaming platform
- 52-55% record label (which will account to signed artists)
- 15% music publishing (shared between music publisher and songwriter/composer)
The union believes that the music publishing share is suppressed because the major publishers are controlled by the major labels. It is in their interests to take a greater share of revenue on the recording side because they pay a far smaller share of it out to artists.
On the music publishing side, deals tend to be 80/20 in favour of the songwriter or composer. We hoped this would be explored in a CMA investigation, and are disappointed that this will not be taken forward.
On pricing remaining static, the MU highlighted the impact of Google, Apple and Amazon on the music streaming market and the suppressing effect they have.
Companies such as Spotify, Deezer and Soundcloud, which focus primarily on music streaming, cannot put their prices up because they are competing with corporations whose profits are derived from other areas of their businesses, for example selling products.
Delivering for music creators
MU General Secretary Naomi Pohl said:
“It is disappointing that the competition issues we see in the music streaming market, which impact on our members' earning capacity, will not be explored fully in a CMA investigation. The CMA's release today highlights what it sees as positive impacts of music streaming, but we feel they have failed to recognise the very serious problems posed to creators.
“In the long term, this could diminish the diversity of UK music available to consumers as musicians are forced to seek other ways to make a living. We had particularly hoped that the CMA would deliver for songwriters who are currently receiving a small share of streaming revenue.
“Our fight to Fix Streaming will continue, and we are still pushing for legislative reform to guarantee fair payments for our members.”
Together we can fix streaming
The Union's fight to Fix Streaming continues. Look out for actions you can take to keep music alive in the next few days.