Economics of music streaming

Culture, Media and Sport Committee Closed Inquiry
Opened: 15 Oct 2020 Closed: 10 Nov 2021 Parliament page
MPs will examine what economic impact music streaming is having on artists, record labels and the sustainability of the wider music industry. With streaming currently accounting for more than half of the global music industry’s revenue, this inquiry will look at the business models operated by platforms such as Spotify, … Read more
21 Recommendations
4 Conclusions
1 Report
7 Oral sessions
5 Letters
7 Events
Activity timeline 14 events
14 Jun
2022
Correspondence
22 Sep
2021
Report published
22 Sep
2021
Correspondence
22 Sep
2021
Correspondence
15 Jul
2021
Report published
22 Mar
2021
Oral evidence
23 Feb
2021
Oral evidence
10 Feb
2021
Oral evidence
4 Feb
2021
Oral evidence
19 Jan
2021
Oral evidence
12 Jan
2021
Correspondence
8 Dec
2020
Oral evidence
Oral evidence sessions 7 sessions
22 Mar 2021
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Amanda Solloway MP · Department for Business, Energy and Industrial Strategy Caroline Dinenage MP · Department for Digital, Culture, Media and Sport Robert Specterman-Green · Department for Culture, Media and Sport Tim Moss · Intellectual Property Office
23 Feb 2021
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Elena Segal · Apple Inc Horacio Gutierrez · Spotify Paul Firth · Amazon
10 Feb 2021
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Geoff Taylor · BPI Graham Davies · Ivors Academy Horace Trubridge · Musicians’ Union Katherine Oyama · YouTube Raoul Chatterjee · Soundcloud Roberto Neri · Music Publishers Association Steve Bené · Twitch
4 Feb 2021
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Paul Pacifico · Association of Independent Music Rupert Skellett · Beggars Group Yvette Griffith · Jazz Re:freshed
19 Jan 2021
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Andrea Martin · PRS for Music David Joseph · Universal Music UK & Ireland Jason Iley · Sony Music UK & Ireland Peter Leathem · Phonographic Performance Ltd Tony Harlow · Warner Music UK
8 Dec 2020
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Fiona Bevan José Luis Sevillano · Artistas Intérpretes o Ejecutantes, Entidad de Gestión de Derechos de Propiedad Intelectual (AIE) Kwame Kwaten · Music Managers Forum Maria Forte · Maria Forte Music Services Ltd Nile Rodgers Soweto Kinch
24 Nov 2020
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Colin Young Ed O'Brien Guy Garvey Nadine Shah Tom Frederikse Tom Gray · The Ivors Academy
Title HC No. Published Items Response
Second Report - Economics of music streaming HC 50 15 Jul 2021 25 Responded
Recommendations & Conclusions
25 results
1 Conclusion Acknowledged
Second Report - Economics of music…
Streaming has undoubtedly helped save the music industry following two decades of digital piracy but...
Streaming has undoubtedly helped save the music industry following two decades of digital piracy but it is clear that what has been saved does not work for everyone. The issues ostensibly created by streaming simply reflect more fundamental, structural problems … Read more
Government Response
The government welcomes the report, acknowledges that many creators are calling for reforms and that the streaming environment is complex, but states more targeted research is needed before deciding on specific actions.
Department for Culture, Media and Sport
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2 Recommendation Acknowledged
Second Report - Economics of music…
We urge Universal and Warner to look again at the issue of unrecouped balances with...
We urge Universal and Warner to look again at the issue of unrecouped balances with a view to enabling more of their legacy artists to receive payments when their music is streamed.
Government Response
The government acknowledges the issue of unrecouped balances and is launching work to better understand fairness in creator remuneration, assessing different models as part of its wider review.
Department for Culture, Media and Sport
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3 Conclusion Deferred
Second Report - Economics of music…
The pitiful returns from music streaming impact the entire creative ecosystem.
The pitiful returns from music streaming impact the entire creative ecosystem. Successful, critically acclaimed professional performers are seeing meagre returns from the dominant mode of music consumption. Non-featured performers are frozen out altogether, impacting what should be a viable career … Read more
Government Response
The Government welcomes the report and acknowledges the impact of poor remuneration on creators. It states that more targeted research and evidence are needed to fully understand the problems and potential solutions before it can decide on action.
Department for Culture, Media and Sport
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4 Recommendation Deferred
Second Report - Economics of music…
The major music companies and independent record labels have consistently asserted that music streaming is...
The major music companies and independent record labels have consistently asserted that music streaming is straightforwardly ‘making available’, and therefore performers should be remunerated as though it was a sale. However, this classification does not consider the complexities of streaming … Read more
Government Response
The Government notes the complexity and potential negative impacts of equitable remuneration, stating it will launch work to better understand issues of fairness in creator and performer remuneration and assess different models before deciding on action.
Department for Culture, Media and Sport
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5 Recommendation Deferred
Second Report - Economics of music…
The right to equitable remuneration is a simple yet effective solution to the problems caused...
The right to equitable remuneration is a simple yet effective solution to the problems caused by poor remuneration from music streaming. It is a right that is already established within UK law and has been applied to streaming elsewhere in … Read more
Government Response
The Government notes the complexity and potential negative impacts of equitable remuneration, stating it will launch work to better understand issues of fairness in creator and performer remuneration and assess different models before deciding on action.
Department for Culture, Media and Sport
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6 Recommendation Deferred
Second Report - Economics of music…
We recommend that the Government legislate so that performers enjoy the right to equitable remuneration...
We recommend that the Government legislate so that performers enjoy the right to equitable remuneration for streaming income. Amending the Copyright, Design and Patents Act 1988 so that the making available right does not preclude the right to equitable remuneration, … Read more
Government Response
The government defers action on legislating for equitable remuneration, stating it is a complex area requiring further work to better understand impacts and assess different models, with an update expected in spring 2022.
Department for Culture, Media and Sport
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7 Recommendation Acknowledged
Second Report - Economics of music…
Despite being an important part in the music creation and music streaming process, song rightsholders...
Despite being an important part in the music creation and music streaming process, song rightsholders are not effectively remunerated for their work. The Government should work with creators and the independent publishing sector to explore ways in which new and … Read more
Government Response
The government agrees on the importance of song rightsholders and commits to bringing together industry representatives to discuss supporting songwriters and composers, to inform any future action.
Department for Culture, Media and Sport
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8 Recommendation Rejected
Second Report - Economics of music…
Metadata issues compound the poor terms on which creators are remunerated.
Metadata issues compound the poor terms on which creators are remunerated. Whilst there is a significant challenge, it is not insurmountable. First, the Government must oblige record labels to provide metadata for the underlying song when they license a recording … Read more
Government Response
The Government agrees on the importance of metadata but proposes to address it through improved awareness and engagement with technology businesses, not by obliging labels or mandating data standards. It explicitly rejects the recommendations on black box revenues, stating they are already regulated, and does not address the creation of a comprehensive musical works database or registration portal.
Department for Culture, Media and Sport
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9 Recommendation Accepted in Part
Second Report - Economics of music…
The licensing and royalty chains of song rights causes considerable confusion and complexity to the...
The licensing and royalty chains of song rights causes considerable confusion and complexity to the system, and songwriters and composers pay the price. There is no single solution to create more efficient and timely royalty chains but the Government can … Read more
Government Response
The government rejects requiring publishers and collecting societies to publish royalty chain information, arguing it is impractical. However, it will convene an industry-led technical working group to agree on transparency standards and will consider global licensing deals in future trade policy.
Department for Culture, Media and Sport
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10 Recommendation Deferred
Second Report - Economics of music…
There is no doubt that the major music groups currently dominate the music industry, both...
There is no doubt that the major music groups currently dominate the music industry, both in terms of overall market share in recording and (to a lesser extent) in publishing, but also through vertical integration, their acquisition of competing services … Read more
Government Response
The government acknowledges concerns about market dominance but states the CMA is an independent regulator and it is for them to decide on a market study, though they have written to the CMA on the recommendation, without committing to making the referral itself.
Department for Culture, Media and Sport
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11 Recommendation Rejected
Second Report - Economics of music…
The Government must make sure that UK law is not enabling the outcome of market...
The Government must make sure that UK law is not enabling the outcome of market dominance. This means that independent labels must be supported to challenge the majors’ dominance and creators must be empowered to offset the disparity in negotiating … Read more
Government Response
The government rejects the recommendation to expand MEGS, place anti-acquisition clauses in grant funding, or introduce a fiscal incentive for the independent music sector, stating MEGS's remit doesn't cover structural issues and tax policy is the Treasury's responsibility.
Department for Culture, Media and Sport
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12 Recommendation Deferred
Second Report - Economics of music…
We recommend that the Government concurrently expand creator rights by introducing a right to recapture...
We recommend that the Government concurrently expand creator rights by introducing a right to recapture works and a right to contract adjustment where an artist’s royalties are disproportionately low compared to the success of their music into the Copyright, Designs … Read more
Government Response
The Government will commission research into the impacts of introducing rights to recapture works and contract adjustment, which will inform whether and how to implement them, with an update expected in spring 2022.
Department for Culture, Media and Sport
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13 Conclusion Acknowledged
Second Report - Economics of music…
Despite the general consensus that direct licensing between the record industry and streaming services is...
Despite the general consensus that direct licensing between the record industry and streaming services is positive, there are ongoing concerns about the majors’ 106 Economics of music streaming position in negotiation, which allows them to benefit at the expense of … Read more
Government Response
The government acknowledges concerns about the dominance of major music groups and has written to the CMA about the committee's observation, but states that it is for the independent CMA to decide how best to use its resources for a market study.
Department for Culture, Media and Sport
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14 Recommendation Accepted
Second Report - Economics of music…
As long as the major record labels also dominate the market for song rights through...
As long as the major record labels also dominate the market for song rights through their publishing operations, it is hard to see whether the song will be valued fairly as a result. It is well-evidenced that redressing the disparities … Read more
Government Response
The government states it has written to the CMA regarding the recommendation to consider how major music groups' dual position in recording and publishing influences song and recording rights value, acknowledging the CMA's independence.
Department for Culture, Media and Sport
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15 Recommendation Accepted in Part
Second Report - Economics of music…
Artists and their representatives face a systemic lack of transparency from both music companies and...
Artists and their representatives face a systemic lack of transparency from both music companies and the streaming services that license their works. This exacerbates the inequities of creator remuneration by creating information asymmetries and preventing them from undertaking their right … Read more
Government Response
The government accepts the need for improved transparency and will convene an industry-led working group to agree on voluntary standards; however, it rejects the recommendation to require publishers and collecting societies to publish full royalty chain information due to feasibility concerns.
Department for Culture, Media and Sport
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16 Recommendation Accepted in Part
Second Report - Economics of music…
The Government has repeatedly told us that it will not implement in UK law provisions...
The Government has repeatedly told us that it will not implement in UK law provisions akin to those established by the Directive on Copyright in the Digital Single Market. We accept that the Directive is not a silver bullet to … Read more
Government Response
The Government acknowledges the need for transparency, stating the IPO will convene an industry working group to agree on voluntary standards for transparency, deferring legislative intervention only if this process is unsatisfactory. It rejects requiring publishers and collecting societies to publish royalty chain information, citing feasibility concerns.
Department for Culture, Media and Sport
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17 Recommendation Deferred
Second Report - Economics of music…
Music curators play an important role in the discovery and consumption of digital music and...
Music curators play an important role in the discovery and consumption of digital music and are influential in how creators are remunerated. It is, therefore, unsurprising that music creators are putting more resources into catching the eye of these curators. … Read more
Government Response
The Government agrees with the recommendation in principle but notes the complexities involved and states it will gather further evidence and carefully consider the case for intervention before proceeding with a code of practice.
Department for Culture, Media and Sport
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18 Recommendation Accepted
Second Report - Economics of music…
Algorithms are fundamental to the operation of streaming services.
Algorithms are fundamental to the operation of streaming services. However, many questions remain about how they influence music consumption and how much oversight exists. The Government should commission research into the impact of streaming services’ algorithms on music consumption, including … Read more
Government Response
The government accepts the recommendation, agreeing there is value in further research on streaming algorithms' impact, and will ask the Centre for Data Ethics and Innovation (CDEI) to lead this research.
Department for Culture, Media and Sport
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19 Recommendation Accepted in Part
Second Report - Economics of music…
The market for streaming services itself is fiercely competitive.
The market for streaming services itself is fiercely competitive. However, there is the potential that companies may leverage other aspects of their business or elsewise use vertical integrations to gain a competitive advantage; indeed, some jurisdictions have considered that this … Read more
Government Response
The Government launched its consultation on the new pro-competition regime in July 2021 and states it will legislate to put the Digital Markets Unit on a statutory footing as soon as Parliamentary time allows, fulfilling the intent but without a specific timeframe.
Department for Culture, Media and Sport
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20 Recommendation Accepted
Second Report - Economics of music…
The Government must ensure that the challenges posed by music streaming to the UK’s prominence...
The Government must ensure that the challenges posed by music streaming to the UK’s prominence regime are duly considered.
Government Response
The Government agrees with the recommendation and states it is duly considering the challenges to the UK’s prominence regime through its strategic review of public service broadcasting and the Digital Radio and Audio review, committing to act on Ofcom’s prominence recommendations through legislation as parliamentary time allows.
Department for Culture, Media and Sport
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21 Conclusion Acknowledged
Second Report - Economics of music…
Safe harbour provisions that have been transposed into UK law have profoundly impacted the market...
Safe harbour provisions that have been transposed into UK law have profoundly impacted the market for digital music consumption. YouTube’s dominance of the music streaming market shows that the market has tipped. Safe harbour gives services that host user-generated content … Read more
Government Response
The Government acknowledges that rightsholders should be properly remunerated and recognizes the difficulties faced, but states that licensing negotiations are private commercial matters and it has no intention of implementing the Copyright Directive. It notes the IPO has identified improvements to access to justice guidance and will consider KYBC obligations in an upcoming IP Crime Strategy.
Department for Culture, Media and Sport
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22 Recommendation Deferred
Second Report - Economics of music…
We note that the CMA has developed a pro-competition framework for tech companies with ‘strategic...
We note that the CMA has developed a pro-competition framework for tech companies with ‘strategic market status’ that dominate digital markets. The CMA should consider exploring designating YouTube’s streaming services as having strategic market status to encourage competition with its … Read more
Government Response
The CMA notes the recommendation to designate YouTube with Strategic Market Status, but states that the relevant pro-competition regime is still under consultation and the independent Digital Markets Unit will determine which assessments to undertake in the future.
Department for Culture, Media and Sport
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23 Recommendation Rejected
Second Report - Economics of music…
As we have acknowledged, the Government has repeatedly told us that it will not implement...
As we have acknowledged, the Government has repeatedly told us that it will not implement the Directive on Copyright in the Digital Single Market. However, to ensure that music creators and companies prosper in the globally important UK music market, … Read more
Government Response
The government agrees on fair remuneration but rejects introducing new legally enforceable obligations for UGC-hosting services, stating private negotiations are commercial matters and that it will not implement the EU Copyright Directive. It notes the IPO is reviewing access to justice for IP cases and will consider 'know your business customer' obligations in an upcoming strategy.
Department for Culture, Media and Sport
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24 Recommendation Deferred
Second Report - Economics of music…
The debate between the predominant pro-rata payment model and alternative methodologies such as user-centric has...
The debate between the predominant pro-rata payment model and alternative methodologies such as user-centric has been compelling. It is positive that new services are inventing new and creative ways to address creators’ and consumers’ concerns about the fairness and transparency … Read more
Government Response
The government notes concerns about potential market dominance and stifled innovation, but defers the decision to the independent CMA on whether to undertake a market study or specific investigation, stating it has written to the CMA regarding the recommendation.
Department for Culture, Media and Sport
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25 Recommendation Not Addressed
Second Report - Economics of music…
As technology continues to evolve, the Government must ensure that copyright law is fit for...
As technology continues to evolve, the Government must ensure that copyright law is fit for purpose and that appropriate mechanisms are in place for rightsholders to enforce their rights. The Intellectual Property Office must not be a passive witness but … Read more
Government Response
The government's response focuses on the proposed Digital Markets Unit and its consultation, discussing SMS designation and pro-competitive interventions, but does not address the committee's specific recommendations regarding the IPO's active role, livestreaming remuneration, or actions against copyright infringement and emerging threats.
Department for Culture, Media and Sport
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Government Response AI assessment · 25 of 21 classified
Accepted 3
Accepted in Part 4
Acknowledged 5
Deferred 9
Not Addressed 1
Rejected 3
Total 21 recs + 4 conclusions
Correspondence 5 letters
14 Jun 2022 To committee Letter from Julia Lopez MP, Minister for Media, Data and Digital Infrastructure, and George Freeman MP, Minister for Science, Research and Innovation, relating to music streaming, 18 May 2022
Parliament page
22 Sep 2021 To committee Letter from the Chair to Andrea Coscelli CBE, Chief Executive, CMA, relating to music streaming, 22 September 2021
Parliament page
22 Sep 2021 Correspondence between the Government and the Competition and Markets Authority, relating to music streaming, 15-20 September 2021
Parliament page
12 Jan 2021 Written evidence: BPI (EMS208)
Parliament page
24 Nov 2020 Background paper: Colin Young music streaming slides
Parliament page