Major UK record labels could face competition inquiry

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YouTube’s dominance over the music streaming market has also been called into question

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Major record labels in the UK could face scrutiny over whether they dominate the music market.

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as reported by BBCThe government has asked the Competition and Markets Authority (CMA) to consider investigating the top three labels: Sony, Warner and Universal Music.

  • Read more: Streaming – what happens next? Artists demand “change in way of doing business”

It has also suggested that the CMA sees YouTube’s dominance over the music streaming market.

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During the summer, lawmakers stressed the need for a “complete reset” of the music industry to address the “pathetic returns” to artists. This comes as part of a report by the Economics of Music Streaming investigation.

The Digital, Culture, Media and Sports (DCMS) selection committee had previously heard evidence from the likes of Radiohead, Elbow, Nadine Shah. Back in April, more than 150 artists — including Paul McCartney and Kate Bush — signed an open letter to Prime Minister Boris Johnson, asking them to help improve the streaming economy.

Julian Knight, who is president of DCMS, has now said that although streaming sites “brought significant benefits to the recorded-music industry, the talent behind it – artists, songwriters and composers – are being lost”.

Radiohead’s Ed O’Brien. credit: press

Knight urged the CMA to look into the commercial power held by the major labels, claiming that they receive the beneficial treatment on indie labels and self-releasing acts of their own material. This includes prominence in popular playlists and storefronts.

While the government said in an official response that such an investigation “may have value”, it was ultimately up to the CMA to decide whether to proceed with the investigation.

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The statement said: “We have written to the CMA on this recommendation.”

The British Phonographic Industry (BPI) said it would comply, “should the CMA conduct a study”.

“We look forward to expanding the label’s role in supercharging the careers of British talent within a complex and dynamic ecosystem,” it continued.

Spotify, Apple Music, Deezer
Spotify, Apple Music and Deezer Apps Credit: Getty

The DCMS committee’s findings, which were released back in July, saw lawmakers call for new legislation that “is enshrined in law”. [acts’] Right to a fair share of earnings to remove the disparity in the payments received by the artists”.

The investigation’s recommendations also included calling on the government to legislate so that artists “enjoy the right to equal remuneration for streaming income”.

While the government said the investigation had provided “invaluable insight” into the streaming model, it said “there is still work to be done” to understand the problems facing musicians.

The government’s response also stated that it wanted to “explore ways for new up-and-coming songwriters”. [and] Musicians” can get a fair salary. This includes working with Credit Due – a new initiative founded by ABBA’s Björn Ulvaeus, which aims to tackle issues surrounding music royalties and metadata.

ABBA’s Björn Ulvaeus. credit: getty

Knight said of the government’s response, “It is testimony to all those who have testified to our investigation that the government has accepted our report as a ‘critical moment’ for the music industry.”

“Within a few days we hope to see the government’s own research published into the pathetic earnings of creators in this digital age and hope it confirms what artists and musicians told us.”

He added: “We will be monitoring the result and what concrete steps the government will take to address this unfairness and reward the talent behind the music.”
Following the DCMS findings to be published in July, Tim Burgess pointed out Granthshala: “We have known for years that so much of the revenue generated from streaming does not reach artists, through campaigns like #BrokenReCord we have learned that a lot of the funds reach major labels, but are diverted from those Those who make it Music that makes money.

“The archaic contracts mean that artists are not paid for the longest time.”

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