The ministers referred the case of the domination of the major record companies to the Competition and Markets Authority.
The Digital, Culture, Media and Sports Committee’s report on the streaming economy previously warned that the “pitiful returns” of the current system were impacting “the entire creative ecosystem.”
He said some successful and critically acclaimed musicians are seeing “meager returns” on their work and that performers not featured on songs are “totally frozen”.
The report also raised “deep concerns” about the position of major music companies in the market.
The majors Sony Music, Warner Music and Universal Music appeared before MPs during the sessions, while tech giants Spotify, Amazon, Apple and YouTube also testified.
Responding to the committee’s recommendations, the government referred the case to the CMA.
The government’s response said, âThe CMA is an independent regulator.
âMarket research can be valuable, but it’s up to CMA to decide how best to use its resources to achieve its goals and make markets work well for consumers and businesses.
âWe wrote to the CMA regarding this recommendation.
The committee also recommended fair compensation legislation to improve the incomes of performers, and the government response said, âThis is a complex area and the government is taking the concerns of music creators to the fore. serious.
âThis is why we are launching work to better understand the issues of equity in the remuneration of creators and performers.
âAs part of this work, the government will be evaluating different models, such as equitable compensation and the artist growth model, to explore how they are likely to affect different parts of the music industry and how they might be. achieved, including through potential legislation.
“He will also explore these issues by engaging with our music industry contact group and plans to take stock of progress in spring 2022.”
The committee further recommended that rights holders be âadequately compensatedâ for works used and shared online by user-generated content platforms such as YouTube.
The government’s response said ministers believe song rights holders are “an important part of the music creation and music streaming process.”
He added: âAs such, he is keen to explore ways in which new and emerging independent songwriters, composers and publishers can be better supported while ensuring that this does not compromise the ability of different actors to. the streaming environment to freely enter into commercial agreements.
âTo this end, as part of its broader work on equitable outcomes in the music industry, the government will bring together industry representatives to take a stand on these issues and inform any future action.â
According to the Broken Record campaign, under the current system, artists receive around 16% of total stream revenue, while record companies receive around 41% and streaming services around 29%.
The investigation, which was launched following a thorough examination prompted by the Covid-19 pandemic, received more than 300 pieces of evidence, including from Chic Nile Rodgers star, Radiohead guitarist Ed O ‘ Brien, Elbow frontman Guy Garvey and singer-songwriter Nadine Shah.
Julian Knight MP, DCMS Committee Chairman, said: âOur investigation of music streaming revealed fundamental problems within the structure of the music industry itself.
âIt is the testimony of all who testified during our investigation that the government recognized our report as a ‘key moment’ for the music industry.
âAbove all, the ministers accepted a key recommendation aimed at returning the domination of major musical groups to the Competition and Markets Authority.
âOur report exposed the unassailable position of these companies. We have provided proof of our deep concern that their dominance is distorting the market.
âIn a few days, we expect the government’s own research to be released on the pitiful incomes of creators in the digital age and hope it will corroborate what artists and musicians have told us.
“We will be monitoring the outcome and the concrete steps the government commits to take to address this injustice and reward the talent behind the music.”
A spokesperson for the British Phonographic Industry (BPI), the independent British association of major record labels, said royalty rates have “increased under streaming – to around 25% from around 18% under the CD era – an increase of 40%, contributing to artists’ revenues which are growing faster than label revenues and to investments in the launch of new acts which are constantly increasing â.
The spokesperson added: âCompetition in the UK music industry is fierce. As the government notes, streaming has opened more avenues to the market for artists and creators. We take note of the government’s response that the CMA is an independent regulator and that any decision to conduct market research is up to them.
âIf the CMA is conducting a study, we are eager to detail the role of labels in boosting careers for UK talent within a complex and dynamic ecosystem.
âAt a time when much of the UK music industry is under pressure from the pandemic, recorded music has returned to growth and continued to invest, benefiting the music community at large. when she needs it most.
“We welcome the government’s recognition of the need for a better understanding of the complexity of the music streaming market, and that industry action to address issues of concern is preferable to legislative intervention.” which can have a negative impact on performers, jeopardizing the return to hard-earned growth after years. decline – and hurting music creators and the global competitiveness of British music.