According to music trade association the BPI, streaming now accounts for 83% of UK music consumption. Following a Select Committee report last year, the CMA has now launched a market study into the music streaming market.

Market studies examine why particular markets may not be working well for consumers. They may lead to a range of outcomes, including: making recommendations to the government to change regulations or public policy; encouraging businesses in the market to self-regulate; taking consumer or competition law enforcement action against firms; making a reference for a more in-depth (phase 2) market investigation; or a “clean bill of health”.

  • The music streaming study will explore a range of factors including:
  • The nature of competition at different levels of the value chain, including the extent to which music companies and music streaming services may have market power;
  • The extent to which the publishing arms of recorded music companies strengthen any market power of such music companies;
  • Possible barriers to entry and expansion which may be faced by smaller and newer music companies and music streaming services, particularly those seeking to introduce disruptive business models or services;
  • The inter-relationships and agreements between music companies and music streaming services and whether they affect competition, innovation and consumer outcomes;
  • The range of music streaming business models, including ad-funded music streaming, premium subscriptions, and user-uploaded content platforms such as YouTube and how they compete with one another;
  • Whether any business practices adopted by music streaming services (for example how they collect and use consumer data) may harm consumers, especially as more adopt music streaming; and
  • How sector developments could change competitive dynamics.

The DCMS Select Committee report argued that the major music groups dominate the industry and have consolidated their market position by becoming the largest asset owners of recording and song rights. The report also pointed to commentary that the major music groups are experiencing historic levels of profitability. In contrast, it is argued that songwriters and performers receive only a small proportion of revenue.

Within music streaming services themselves, the Committee noted that there is a potential for some services which have a strong position in other markets, such as smartphones or voice assistants, to leverage that aspect of their business to gain a competitive advantage over other music streaming services that do not have such wider businesses. It is also argued that the contractual agreements between the major music groups and streaming services may affect innovation by streaming services and influence the music promoted to consumers.

The CMA must, within 12 months of publication of a market study notice, publish a market study report setting out its findings and the action (if any) it proposes to take.


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