Following the call by MPs on the DCMS Committee for the Competition & Markets Authority (CMA) to investigate the potential market dominance of the major labels, both the competition regulator and the government have issued a response to Music Week.
The explosive report from MPs, following several months of hearings during their inquiry, urged the government to take action in order to “reset streaming” because of concerns about how revenues are shared between music creators, major labels and other rights-holders.
The CMA is already looking into the acquisition of AWAL by Sony Music. There’s now the potential for the competition regulator to look at the big three in recorded music.
In their report on the economics of streaming, MPs raised fears about the power of the majors, particularly in relation to any competitive advantage over independent labels and the potential “disparity” in negotiating power for creators when signing deals. There are also “ongoing concerns” about the majors’ position in terms of direct licensing of streaming platforms, which MPs suggest could benefit them at the expense of indies and self-releasing acts.
We will consider carefully the recommendations in the report
A CMA spokesperson told Music Week: “The CMA strongly supports competitive digital markets. We will consider carefully the recommendations in the report that relate to the CMA, and we will work with DCMS to respond to these in due course."
The Department for Digital, Culture, Media & Sport has also responded to the report, which urges the government to intervene in a number of areas, including referring the question of market dominance to the CMA, introducing equitable remuneration for performers, and working with creators and the independent publishing sector to explore ways in which emerging songwriters and composers can be supported to have sustainable careers.
A government spokesperson told Music Week: “We welcome the Select Committee's report on the economics of music streaming and recognise the importance of this work for the industry. We will issue a response to the report in due course. We are also gathering our own evidence through a research project looking at creators’ earnings in streaming and will consider the findings from this in the coming months.”
In a response to the report today, BPI chief executive Geoff Taylor highlighted the levels of investment in artists by major labels.
"Labels are committed to ensuring that artists share fairly in the growth from streaming," he added. "We will carefully examine the findings of this report, but it is essential that any policy proposals avoid unintended consequences for investment into new talent, and do not imperil this country’s extraordinary global success in music."