The CMA notes that in the UK more than 80% of recorded music is now listened to via a streaming service rather than using traditional physical media like CDs and vinyl. Linking the creators making the music and the fans listening to it through a streaming service is a complex network of companies that help make, promote and distribute recorded music.

The CMA’s new study will examine the music streaming market from creator to consumer, paying particular attention to the roles played by record labels and music streaming services. As part of its assessment of how well the market is working for audiences, the CMA will consider whether innovation is being stifled and if any firms hold excessive power. The CMA says that the study will help build a deeper understanding of how firms in the market influence listeners’ choices and experiences.

While focusing on potential harm to consumers, the CMA will also assess whether any lack of competition between music companies could affect the musicians, singers and songwriters whose interests are intertwined with those of music lovers.

In particular, the CMA intends to explore:

• 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 impact upon 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.

If the CMA finds problems, it will consider what action may be necessary.

The CMA will conduct the study over the next year, gathering evidence from a wide range of stakeholders. It will provide an update within six months and a final report within twelve months setting out its findings, any concerns it identifies and its proposed recommendations or remedies to those concerns. The CMA’s final report must be published no later than 26 January 2023.

The CMA welcomes comments on any of the issues raised in its Statement of Scope and the accompanying Market Study Notice from consumers, businesses and other interested parties. The deadline for responses is 17 February 2022. To read the CMA’s press release in full and for links to the Statement of Scope and the Market Study Notice, click here.