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Streaming services not making "excessive profits" say UK watchdog

No action will now be taken against the likes of Spotify and Apple Music for allegedly underpaying artists

  • Words: Isaac Muk | Photo: Ralph Nas
  • 30 November 2022
Streaming services not making "excessive profits" say UK watchdog

Music streaming services and record labels are not making excess profits and therefore can't afford to pay artists more, according to a report from the UK’s Competition and Markets Authority (CMA), the nation’s competition watchdog.

It means that there will be no further action taken to try and force streaming services such as Spotify, Apple Music and TIDAL, and labels to pay artists more, which comes as a blow to many who have been struggling financially as music listening has been increasingly digitised and concentrated online.

They found while streaming had meant access to releasing music was easier, competition to reach listeners’ ears was more difficult than ever, with the number of artists releasing music doubling from 200,000 in 2014 to 400,000 in 2020.

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It means that the competition to get paid has become fiercer as well, with a musician having 12 million streams on a song in the UK earning around £12,000 – but less than 1% of artists record that many streams of their music.

The CMA acknowledged the struggles of musicians, particularly those with smaller followings – as they found that only the most popular 0.4% of artists recorded 60% of music streams.

However, they ruled that it would be “unlikely” any intervention the CMA could take would lead to artists being paid more.

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While artists have struggled, the CMA said that fans have benefitted financially from the digitisation of music, with prices falling in real terms by over 20% between 2009 and 2021, and streaming services offering ad-free experiences meaning that they take less revenue than they could.

In a press statement Sarah Cardnell, the interim CEO of the CMA said: “Streaming has transformed how fans access vast catalogues of music, providing a valuable platform for artists to reach new listeners quickly, and at a price for consumers that has declined in real terms over the years.

“However, we heard from many artists and songwriters across the UK about how they struggle to make a decent living from these services,” she continued. “These are understandable concerns, but our findings show that these are not the result of ineffective competition ¬– and intervention by the CMA would not release more money into the system that would help artists or songwriters.”

Isaac Muk is Mixmag's Digital Intern, follow him on Twitter

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