The UK’s competition watchdog plans to investigate music streaming to examine if a market dominated by firms like Spotify and Apple is beneficial to consumers.
The statement by the watchdog comes after a report released earlier this year by a UK parliamentary committee warning that links between music labels and streaming services could hinder innovation in the industry.
The Competition and Markets Authority in the United Kingdom has adopted a more active role in the regulation of digital markets, with probes into the power of Google, Facebook, and Apple in various sectors of the ecosystem already underway.
It said it would now focus on music streaming, which accounts for 80% of music consumption in the UK and is dominated by companies like Spotify, Apple Music, Amazon, and Alphabet Inc’s YouTube.
“The UK has a love affair with music and is home to many of the world`s most popular artists,” CMA Chief Executive Andrea Coscelli said. “We want to do everything we can to ensure that this sector is competitive, thriving and works in the interests of music lovers.”
After being battered by piracy in the late 1990s, the music industry shifted to a streaming model supported by either advertising or subscriptions as a means of securing greater long-term revenue.
According to official estimates, the global recorded music market increased by 7.4% to $21.6 billion in 2020, with a surge in demand for premium streaming services leading the way.
According to a British assessment on the industry, there would be 139 billion audio streams in 2020. Despite the development, artists have long complained that streaming companies do not pay them fairly.
The three main music corporations, Universal, Sony, and Warner, covered up to 75 percent of the UK recording market and had tight relationships with streaming platforms, according to the UK parliamentary study, forcing them to doubt the sector’s competition.
A market study is performed to investigate a sector and determine whether or not intervention is required. Requesting that the government modify legislation, encouraging businesses to self-regulate, initiating action against firms, and conducting a complete, in-depth inquiry are all possible outcomes.