Major music streaming services to face competition inquiry

Services including YouTube, Spotify, Apple Music and Amazon will be looked at by the CMA (stock image)

The UK's top music streaming services are to come under scrutiny as part of a wider study to gauge if the market is sufficiently competitive.

YouTube, Spotify, Apple Music and Amazon will be looked at by the Competition and Markets Authority.

MPs recently demanded a "complete reset" of the streaming industry, amid "pitiful returns" for artists.

A DCMS Committee report called for the CMA to look into streaming and the power of the major players.

On Tuesday, the CMA confirmed it will make moves to begin such an investigation.

DCMS Committee Chair Julian Knight MP said: "That the CMA has made this a priority is a big result for the DCMS Committee, endorsing one of the key recommendations of our inquiry into music streaming.

"Our investigation exposed fundamental problems within the structure of the music industry itself. This action marks a key step forward."

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Following discussion by the CMA board, the regulator will carry out work to consider and develop the final scope of the market study, before formally launching it as soon as possible.

The CMA has written to the government and the DCMS Committee to outline its intended next steps.

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Andrea Coscelli, chief executive of the CMA, said: "The UK has a love affair with music and is home to many of the world's most popular artists.

"We want to do everything we can to ensure that this sector is competitive, thriving and works in the interests of music lovers.

"Over the past decade, the music industry has evolved almost beyond recognition, with streaming now accounting for more than 80% of all music listened to in this country.

"A market study will help us to understand these radical changes and build a view as to whether competition in this sector is working well or whether further action needs to be taken."

'Unassailable positions'

Market studies are used by the CMA to identify and tackle any competition and consumer issues.

The British Phonographic Industry (BPI), which represents the UK's recorded-music industry, has said it would comply with any inquiry.

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"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," the body said previously.

Separately to the proposed market study, an independent CMA panel is investigating Sony's completed acquisition of Awal.

Awal is an artist and and label services provider which has released music by artists including Little Simz, Nick Cave and the Bad Seeds and Billie Eilish's brother and collaborator Finneas.

The CMA said last month the distribution of recorded music in the UK was dominated by three big groups - Universal Music, Sony Music and Warner Music.

It added that Sony's acquisition of Awal could lead to a worse deal for musicians and that Awal could have become a significant competitor in its own right if left to work alone.

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The culture committee's report, issued in July, was ultimately critical of the UK music industry, after hearing evidence from musicians such as Nile Rodgers, Elbow and Radiohead in a six-month inquiry into music streaming.

While streaming had helped save the music industry, after two decades of illegal downloads, record labels and streaming companies had subsequently "leveraged structural advantages to achieve seemingly unassailable positions" in their markets, it said.

In its response, the government said the select committee's inquiry had provided "invaluable insights" into music streaming but "there is still work to be done to understand the problems musicians are facing".

It called for more research into the way musicians were paid and royalties shared, saying it would "assess different models" to see how they would affect the industry.

The government also said it wanted to "explore ways in which new and upcoming songwriters [and] composers" could be paid more fairly.