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Responses to CMA interim report on music & streaming market study



AIM CEO Paul Pacifico:
"We welcome the CMA's update report which reinforces what we know – that building success in music is hard – and underlines the need for organisations across music to work together to secure positive outcomes for the sector. Ultimately, AIM's community of creative entrepreneurs want to be assured they are fighting a fair fight, and we will continue to work across industry and government to help ensure UK music remains world-leading."
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Geoff Taylor, Chief Executive BPI
, said: 
"We welcome the CMA's preliminary findings, which have concluded that the streaming market is competitive, providing artists with more ways to release their music, and fans with more choice and value than ever before.  We and our many and varied record label members are focused on investing in British artists, building their global fanbases, and sustaining the continued success of British music. We will continue to engage with the CMA and government to help ensure that the streaming market works to the benefit of artists, songwriters, record companies and fans."

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The Musicians' Union (MU) and The Ivors Academy have expressed disappointment at the CMA's decision, announced in its report today, that they will not proceed with a full investigation into the music streaming market.

The CMA report suggests that consumers are well served by the current music streaming market. It references concerns raised by musician and creator representatives, but it does not support our contention that these are caused by market distortions or restrictions.

Along with other industry bodies and stakeholders, the MU and The Ivors Academy made detailed written submissions to the CMA and met with them to outline how their members are affected by the streaming market.

The two big issues from the Union and Academy's perspective, in competition terms, are the major labels' dominance of the market and suppression of the value of music publishing - and therefore royalties to songwriters - and also pricing remaining static for so long. The CMA did not find evidence of the suppression by the major labels of the music publishing share of revenue, which is the main focus of our collective response today.

Naomi Pohl, MU General Secretary, said: 'It is disappointing that the competition issues we see in the music streaming market, which impact on our members' earning capacity, will not be explored fully in a CMA investigation. The CMA's release today highlights what it sees as positive impacts of music streaming, but we feel they have failed to recognise the very serious problems posed to creators.

'In the long term, this could diminish the diversity of British music available to consumers as musicians are forced to seek other ways to make a living. We had particularly hoped that the CMA would deliver for songwriters who are currently receiving a small share of streaming revenue. Our fight to 'Fix Streaming' will continue, and we are still pushing for legislative reform to guarantee fair payments for our members.'

Tom Gray, Chair of The Ivors Academy said, 'Without doubt, the CMA's decision not to launch a full market investigation is disappointing for songwriters and composers and fails to address the urgent need to fully and properly value the song within streaming. While there have been positive steps to address historic contracts and explore user-centric models, much more needs to be done to put music creators at the heart of music, so they are properly rewarded for their work. It's a long road to fair and equal treatment and we are committed to working with music creators, the Intellectual Property Office and partners to achieve this.'

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ERA STATEMENT ON THE COMPETITION AND MARKETS AUTHORITY MARKET STUDY INTO MUSIC STREAMING

The Digital Entertainment and Retail Association, ERA, welcomes the update paper of the Competition and Markets Authority (CMA) on its market study into music and streaming.

The report vindicates ERA's view that the investment and innovation of music streaming platforms has been overwhelmingly positive for consumers as well as for the music industry.

Thanks to streaming services, consumers have greater access to a greater variety of music than ever before and an array of price and service propositions.

Meanwhile for the recorded music industry, streaming services have rescued a sector that had been shrinking rapidly due to piracy and have delivered over £5 billion of new revenue in the UK alone. 

Recent forecasts from Goldman Sachs and the consultancy Midia suggest that UK streaming revenues will grow by a further 70%-100% by 2030 with the vast majority of that digital dividend flowing to the music industry. 

ERA and its members will continue to assist the CMA in its enquiries ahead of the publication of its final report in January 2023.  Meanwhile ERA welcomes the progress which has already been made in the parallel process initiated by the DCMS and the Intellectual Property Office and pledges its commitment to do what it can to improve transparency, data standards and data quality to speed the flow of money to artists and songwriters.

ERA CEO Kim Bayley said, "The transformation and return to health of the music industry through streaming is an incredible success story, driven by the innovation and investment of streaming platforms. We need to continue to build on that success and ensure that the market works for everyone involved."

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HIPGNOSIS SONG MANAGEMENT RESPONSE TO CMA DECISION NOT TO CONDUCT A FULL MARKET INVESTIGATION INTO THE MUSIC INDUSTRY

Hipgnosis Song Management has responded to the decision of the Competition and Markets Authority (CMA) to not conduct a full market investigation into the music industry following the conclusion of its initial market study.

Commenting on the decision, Merck Mercuriadis, Founder and CEO of Hipgnosis Song Management said:

"We would like to thank the CMA for acknowledging in its report today the lack of transparency in the music streaming market, and for highlighting the continued dominance of the market by the major labels and recorded music, along with the severely adverse impact this is having on songwriters’ ability to earn a living. However, with 70% of all those responding to the CMA consultation calling for reform, it is regrettable that the CMA is not minded to investigate and address the clear failures its study identified. 

“The DCMS select committee in its July 2021 report on the economics of music streaming -  “Music streaming must modernize. Is anybody listening?” - called for the CMA to address the economic impact of the music majors’ dominance.

“Today the CMA has not acted to address the impact on the creative songwriting community, and this is a missed opportunity to follow up on those concerns raised by MPs on the DCMS select committee. It is a disappointment for songwriters who earn pitiful returns from streaming, not because there is not enough to go round, but simply because it is not being shared fairly and equitably.

“Hipgnosis will continue to call for fundamental reform of a broken system which does not recognise the paramount role of the songwriter in the music ecosystem.  

“We have always believed that the ultimate solution lies within the music industry itself and we will continue to advocate on behalf of songwriters with the major recorded music companies to push for a fair and equitable split. There would be no recorded music industry without songwriters.

“Legislative and government authorities have the power to redress the economic imbalance where major recorded music companies that own and control the major publishing companies are purposefully  undervaluing the songwriter’s contribution. The IPO has a key role to play in redressing the imbalance and we will continue to support its work and efforts.

“Hipgnosis will continue to campaign for change at the highest levels, using our success to advocate and fight on behalf of the songwriting community and to take the songwriter from the bottom of the economic equation to the top."

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Annabella Coldrick, Chief Executive, Music Managers Forum & David Martin, CEO, Featured Artists Coalition 

By their own admission, this initial report from the Competition & Markets Authority is primarily focussed on consumers. In that context, we agree that streaming has been hugely positive. The recorded market is booming, and music fans have never had such choice and access to music.

But when it comes to the impact on artists, songwriters and the creator community, the findings do not represent reality, particularly in the context of record label profits, which are seeing double digit year on year growth. Many of the more complex and contentious issues raised by our members - for instance, around contractual reforms, disparity in negotiating power or the 'blank cheque' advances paid to major labels as part of licensing negotiations - are simply not referenced at all.

On the face of it, the CMA report is disappointing for music makers. However, all of these issues remain the subject of intense discussion at the Intellectual Property Office, with a stated commitment to legislate if the industry cannot agree to market reform. It is ultimately this process that will deliver the most tangible results for artists, songwriters and music creators, and the FAC and MMF will be placing full focus on achieving a fairer deal for our members either via these IPO workstreams or through legislative intervention.

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