Record labels hail UK competition authority report on streaming, as Merck Mercuriadis slams CMA for not using ‘powers at their disposal to address issues they identify’

On Tuesday, the UK’s main regulatory competition watchdog – the Competitions and Markets Authority (CMA) – concluded its independent study of the streaming music market in the country.

Among the AMC’s findings is that large-scale record labels are “[not] likely to be manufacturing important excess profits that could be shared with creators”.

It also concluded that streaming pay is an elite pursuit, with over 60% of UK streams containing music recorded by just 0.4% of top artists.

The announcement follows a music industry inquiry which came after an inter-parliamentary committee of UK politicians called for a ‘comprehensive reset’ of music streaming in July last year after investigation in the streaming economy.

A related report recommended that the majors’ dominance of the UK recorded music industry be reported to the UK’s competition watchdog – the Competitions and Markets Authority (CMA).

The CMA then launched a “market study” on the power dynamics of the recording industry. The CMA final 165 page report about it was published in the UK on Tuesday 29 November.

Announcing the final report on Tuesday, November 29, CMA Acting CEO Sarah Cardell said, “While this report marks the end of CMA’s market research, which addresses concerns previously raised about of competition, we also hope that the detail and factual picture we have been able to build of this relatively new sector will provide a basis that can be used by policy makers to determine whether additional measures are needed to help creators.

The study result received a mixed response from various music industry figures and organizations.

Merck MercuriadisCEO and Founder of hipgnosis Song management, voiced disappointment with the outcome of the CMA report.

In a statement released Tuesday, Mercuriadis said: “Today’s CMA report agreed with DCMS select committee on industry issues which means that songwriters are not fairly compensated for their work”.

He added: “The CMA clarified that most songwriters and artists do not have access to clear payment statements, damages caused by NDAs and acknowledge the conflict of interest between labels and publishers, resulting in reduced revenue for publishers and songwriters – even but without songwriters, there would be no music industry.

“Yet rather than using the powers at their disposal to solve the problems they identify, they have simply sought pass the buck – a double whammy for songwriters and artists who are losing big bucks income continuously and now find that the CMA does not want to act.

“Rather than using the powers at their disposal to address the issues they identify, they have simply sought to pass the buck to each other – a double whammy for songwriters and artists who are losing significant streaming revenue and now find that the CMA does not want to act.”

Merck Mercuriadis, Hipgnose

Mercuriadis continues: “The initial work and recommendations of the DCMS Select Committee were excellent, we now need to turn to them, the IPO and the government who must now take up the baton abandoned by the CMA.

“The Digital Markets Bill provides the ideal vehicle to resolve these issues once and for all, ensure everyone is paid fairly for their contribution and ensures that the UK is a center of great musical creation long into the future.

“The report reinforces our view that the most effective way to enable even more artists to have a sustainable career in music is for labels to continue to invest in talent and grow the market.”

BPI spokesperson

A spokesperson for the BPI, which represents independent and major record labels across the UK, welcomed what he called “the CMA’s objective and evidence-based report which confirms that the streaming market is competitive”.

BPI added that the organization believes the industry “provides fans with accessible and affordable music and a wider choice of artists in an environment in which many more succeed and where artist and songwriter royalty rates- composers have increased”.

The BPI spokesperson added: “As the most definitive analysis of these issues to date, this report will help inform the work we and the industry are already doing in partnership with the government to further strengthen music. UK and to ensure that the UK remains globally competitive.

“The report reinforces our view that the most effective way to enable even more artists to have a sustainable career in music is for labels to continue to invest in talent and grow the market.”

“While consumers have clearly benefited enormously from greater access to music at decreasing cost, we need to ensure that music is not undervalued and balance that with the opportunity for more creators to benefit from ‘a sustainable digital ecosystem.’

Paul Pacifico, OBJECTIVE

UK Association of Independent Music CEO Paul Pacifico said: “While consumers have clearly benefited enormously from greater access to music at decreasing cost, we need to ensure that music not be undervalued and to balance this with the possibility for more creators to benefit from a sustainable digital ecosystem.

“The independent sector has led the way in developing innovative deal structures and business models which the AMC highlights as having played a key role in shaping music’s response to digital disruption and we must ensure that any measures the government might consider do not harm these essential entrepreneurs and investors in creative careers.

“Going forward, we must continue to work together as an industry on transparency and data to maximize the opportunity for our industry that continuous survey represents.”The music industry around the world