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Responses to the UK government’s response to Parliament’s Economics Of Streaming Report

By | Published on Wednesday 22 September 2021

Streaming services

Julian Knight MP, Chair of the Digital, Culture, Media & Sport Select Committee: “Our inquiry into music streaming exposed fundamental problems within the structure of the music industry itself. It is testimony to all those who gave evidence to our inquiry that the government has acknowledged our report as a ‘key moment’ for the music industry”.

“Crucially, ministers have accepted a key recommendation to refer the dominance of the major music groups to the Competition & Markets Authority. Our report laid bare the unassailable position these companies have achieved. We provided evidence of deep concern that their dominance was distorting the market”.

“Within days we expect to see the government’s own research published into the pitiful earning of creators in this digital age and hope it will corroborate what artists and musicians told us. We will be monitoring the outcome and what tangible steps the government pledges to take to redress this unfairness and reward the talent behind the music”.

Graham Davies, CEO of The Ivors Academy: “This is an exciting moment and opportunity for change which we fully embrace. We are pleased the government has recognised that the global streaming environment must be transparent and fair. They have accepted that the music industry is failing in a number of areas, and needs help to embrace this modernisation and reform agenda. Like us, the government sees the growth and benefits that will come from a modern music industry that properly rewards creators”.

A spokesperson for record industry trade group BPI: “Competition in the UK music industry is fierce. As the government observes, streaming has provided more routes to market for artists and creators. We note the government’s response that the CMA is an independent regulator and any decision to conduct a market study rests with them. Should the CMA conduct a study, we look forward to detailing labels’ role in supercharging the careers of British talent within a complex and dynamic ecosystem”.

“At a time when much of the UK music sector has come under pressure as a result of the pandemic, recorded music has returned to growth and continued to invest, benefitting the wider music community when most needed. We welcome government’s recognition of the need for a better understanding of the complexity of the music streaming market, and that industry action to address issues of concern is preferable to legislative intervention that may negatively impact performers, jeopardising the hard won return to growth after years of decline – and harming music creators and UK music’s global competitiveness”.

“We look forward to participating actively in further research and industry working groups on transparency and metadata. Streaming means that more artists are succeeding commercially than ever before. Supporting further market growth and preserving UK music’s dynamism, investment and innovation is the most effective way to ensure that even more artists benefit”.

Paul Pacifico, CEO of the Association Of Independent Music: “For many years, the independent community has been pushing back against hyper-consolidation in the music market and the government’s referral to the CMA is an opportunity for a proper assessment of the negative impact this might be having on artist choice, deal terms and other crucial factors needed to achieve a well functioning music ecosystem”.

“We have stated all along that much can be done to improve the music streaming market and the IMPALA Ten Point Planset out numerous ways that this could be achieved. We welcome the government’s willingness to examine proposed solutions including AIM’s ‘artist growth model’ to enable more – and more diverse – artists to earn better from streaming. We look forward to continuing to work with government and industry partners to pursue better outcomes for artists and entrepreneurs in music together”.

David Martin, CEO of the Featured Artists Coalition & Annabella Coldrick, CEO of the Music Managers Forum:“In the week where recorded music companies hit stellar valuations due to the streaming boom, we are pleased to see that the systematic inequalities faced by generations of artists, songwriters and musicians, which were highlighted by this groundbreaking inquiry, are now being acknowledged by the government”.

“It’s encouraging to see the government agree that regulatory frameworks, including copyright laws, have not kept pace with the changes brought about by streaming. As the FAC and MMF have continually advocated through our ‘Dissecting The Digital Dollar’ work, addressing these issues will require both legislation and industry change”.

“On this front, we are especially pleased that the majority of arguments detailed in our recent white paper have been acknowledged. We fully support the push for a full-blown investigation of the recorded music market by the Competition & Markets Authority building on their recent work with AWAL and Sony. We also have long called for the creation of an industry forum overseen by government – now called the ‘contact group’ – to drive forward changes across the recorded and publishing sectors in areas such as contracts, licensing, transparency and welfare”.

“However, we find it a pity that the issues around royalty chains, transparency and black box distribution have not been adequately acknowledged, as current legislation overseeing [collecting societies] is ineffective. We hope that these can be explored further within the contact group”.

“The government using its influence to pressure our sector to agree to a modern code of practice covering all these issues would be a big leap forward and, as part of the contact group, both the FAC and MMF stand ready to contribute”.

A spokesperson for IMPALA, the pan-European trade group for the independent sector: “Having a competitive, open and responsible music market is vital. As a sector, we have been raising concerns about increasing consolidation for decades. We have repeatedly flagged the need to have structural and remedial measures in place to address the consequences and ensure the music market is competitive and open”.

“IMPALA welcomes the investigation by the CMA into concentration in the music market in the UK. As far as streaming is concerned, we have key recommendations for labels as well as services in our Ten Point Streaming Plan. We also looked into equitable remuneration and concluded it is not equitable. Our view is that it would be damaging for emerging artists and would not actually introduce effective change”.

“Our members’ job as independent music companies is to maximise revenues for our artists and help diverse artists break through. Our members are inundated more than ever before by artists looking for label partners and we need the right conditions to take on these artists. Our vision is for a market full of opportunity and market access is crucial”.

“The digital music market is of course fundamental in today’s ecosystem. We have raised the question of competition in this sector too and the power of a handful of global digital players. Being indispensable trading partners comes with responsibilities. Our Ten Point Plan for streaming reform flags many of these issues. We believe, for example, that more needs to be done to maximise revenues for artists and to boost diversity”.

“We understand that this is to be the remit of the new Digital Markets Unit within the CMA. We would urge a clear investigation into these issues, including why the music market today still only represents 35% of its peak when adjusted for inflation, why the real subscription prices for music have actually gone down, the impact of the key factors exerting downward pressure on prices such as the value gap, an assessment of royalty reduction programmes such as Spotify’s Discovery Mode and whether the very structure of the digital market and key players is in the public interest”.

“We would also urge the UK government to pursue a legislative response on the value gap and not fall behind the rest of Europe. We look forward to working with the CMA, the Digital Markets Unit and the UK government on all these issues”.

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