DCMS Committee launches inquiry into the economics of music streaming

Posted: October 21, 2020

The Digital, Culture, Media and Sport Committee has announced that it will be analysing the business models used by streaming platforms, and the effects that those can have on artists and, in particular, emerging artists.

The Committee’s announcement reports that music streaming now accounts for more than half of the revenue generated by the music industry, with £1 billion being generated in the UK alone for music streaming in 2019.  Despite this, it claims that artists can be paid as little as 13% of the income generated.

The Committee’s chair, Julian Knight MP, has said that: “While streaming is a growing and important part of the music industry contributing billions to global wealth, its success cannot come at the expense of talented and lesser-known artists.”

The Committee is inviting written submissions by 6.00 p.m. on Monday 16 November 2020, and it is hoping to hear from industry experts, artists and streaming platforms to understand the impact that music streaming has had on the music industry.  The questions for stakeholders are:  

  • What are the dominant business models of platforms that offer music streaming as a service?
  • Have new features associated with streaming platforms, such as algorithmic curation of music or company playlists, influenced consumer habits, tastes etc.?
  • What has been the economic impact and long-term implications of streaming on the music industry, including for artists, record labels, record shops etc.?
  • How can the government protect the industry from knock-on effects, such as increased piracy of music?  Does the UK need an equivalent of the Copyright Directive?
  • Do alternative business models exist?  How can policy favour more equitable business models?

Given that the UK will not be implementing the Copyright Directive into UK law following Brexit, many will be watching closely to see whether this inquiry increases pressure on the government to implement legislation comparable to the Copyright Directive and, in particular, the hotly contested changes made to “safe harbour” defences.

Rights-holders will also be waiting to see whether the inquiry reveals more information about the financial models operated by some of the world’s biggest streaming platforms, including Spotify, Apple Music, Amazon Music and YouTube Music (which will replace Google Play from December this year). 

More information on the inquiry, including on how to submit written evidence, is available here.

Jessie Merwood, Associate, Simkins LLP

Louise Jordan, Trainee Solicitor, Simkins LLP