Music streaming giants not making enough profits to pay artists more, finds CMA
According to a recent investigation by the UK’s Competition and Markets Authority (CMA), streaming services and associated record labels are not making excess profits, and can therefore not afford to pay artists more money. The CMA, who acts as the UK’s competition watchdog, will take no further action against streaming giants like Spotify, TIDAL, and Apple Music, despite a call for these giants to reassess their profit sharing models.
The report finds that despite releasing music becoming more accessible than before, the streaming market has become more competitive than ever, with artists fighting to attract listeners as the market continues to saturate. The number of artists releasing music on streaming services has doubled from 200,000 in 2014 to 400,000 this year, intensifying the competition. To earn £12,000, an artist in the UK would need about 12 million streams on a song, though only 1% of artists actually achieve this number.
The CMA found that the most popular artists accounted for 0.4% of the total number of artists releasing music to streaming services, and that this percentage accounted for 60% of total streams. While they recognised the struggles faced by smaller artists, the CMA said there was little they could do to intervene. Acting CEO of the CMA, Sarah Cardnell said, “We heard from many artists and songwriters across the UK about how they struggle to make a decent living from these services. 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.”
The streaming era has given much of the power to fans. According to the CMA, consumers have benefitted most, with the cost of music falling significantly between 2009 and now. The digitisation of music means that fans have access to vast catalogs for significantly less money, with the cost of music for consumers falling in real terms by around 20%.