Music streaming model requires ‘complete reset’ to protect artists, DCMS report concludes

The music streaming model is in need of a “complete reset” in order to properly reward musicians and songwriters, an inquiry has concluded.

The Digital, Culture, Media and Sport Committee’s (DCMS) report on the economics of streaming warns “pitiful returns” from the current system are impacting the “entire creative ecosystem”.

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At a glance: 5 key points

– A report from the Digital, Culture, Media and Sport Committee on the economics of streaming found the music streaming model is in need of a “complete reset” in order to properly reward musicians and songwriters.

– The report says some successful and critically acclaimed musicians are seeing “meagre returns” from their work and non-featured performers on songs are being “frozen out altogether”.

– The report also raises “deep concerns” about the position of the major music companies in the market, and calls on the Government to refer the case to the Competition and Markets Authority (CMA) to launch a market study into the “economic impact of the majors’ dominance”.

– According to the Broken Record campaign, under the current system artists receive around 16% of the total income from streams, while record companies receive around 41% and streaming services around 29%.

– The inquiry was launched following increased scrutiny promoted by the coronavirus pandemic, and the impact it had on musicians. More than 300 pieces of evidence were received, including from Chic star Nile Rodgers, Radiohead guitarist Ed O’Brien, Elbow frontman Guy Garvey and singer-songwriter Nadine Shah.

What’s been said

Responding to the DCMS report, a CMA spokesperson said: “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.”

Chair of the DCMS Committee Julian Knight said: “While streaming has brought significant profits to the recorded music industry, the talent behind it – performers, songwriters and composers – are losing out.

“Only a complete reset of streaming that enshrines in law their rights to a fair share of the earnings will do.

“However, the issues we’ve examined reflect much deeper and more fundamental problems within the structuring of the recorded music industry itself.

“We have real concerns about the way the market is operating, with platforms like YouTube able to gain an unfair advantage over competitors and the independent music sector struggling to compete against the dominance of the major labels.

“We’ve heard of witnesses being afraid to speak out in case they lose favour with record labels or streaming services. It’s time for the Government to order an investigation by the Competition and Markets Authority on the distortions and disparities we’ve uncovered.”