U.K. REFERS MUSIC GROUPS TO "DAMNING REPORT"

The U.K. has referred the major music groups to a Competition and Markets Authority (CMA) market study on the economic impact of their dominance following a recommendation by a recently published streaming report.

Released in July, the damning report, compiled by the DCMS (Digital, Culture, Media and Sport) Select Committee with evidence from across the British music industry, concluded that artists must have a legal right to a fairer share of streaming revenues and called for a "complete reset."

The government has called the report “a key moment for the music industry.” In response to its recommendation for equitable remuneration for performers on streaming income, the government will soon publish research on creators’ earnings in the digital age, corroborating evidence given to the committee that contractual arrangements among performers, labels and platforms appear to disadvantage some players in the streaming environment.

On copyright, the government agreed that rightsholders should be properly compensated for works used and shared online by user-generated content platforms such as YouTube and recognized the difficulties rightsholders face given the complexity of licensing negotiations. The response also notes that the government will consider what lessons can be learned from EU member states from the Copyright Directive to improve the position of rightsholders entering into licensing negotiations with user-generated-content platforms.

Chair of the DCMS Committee Julian Knight MP welcomed the CMA referral. “Our report laid bare the unassailable position these companies have achieved. We provided evidence of deep concern that their dominance was distorting the market.” In addition, Knight said he expects the creator-earnings research to reveal the “pitiful earnings of creators in the digital age.”

A BPI spokesperson said they look forward to “detailing the labels' role in supercharging the careers of British talent within a complex and dynamic ecosystem,” should a CMA study proceed. The trade body also noted that “industry action” to address issues of concern “is preferable to legislative intervention that may negatively impact performers, jeopardizing the hard-won return to growth after years of decline—and harming music creators and U.K. music's global competitiveness.”

David Martin, CEO of the Featured Artists Coalition and Annabella Coldrick, CEO of the Music Managers Forum, welcomed the development. “In a week where recorded-music companies hit stellar valuations due to the streaming boom, we are pleased to see that the systematic inequalities faced by generations of artists, songwriters and musicians, which were highlighted by this groundbreaking inquiry, are now being acknowledged by the government.”

However, Martin and Coldrick both pointed out that issues around royalty chains, transparency and black-box distribution "have not been adequately acknowledged, as current legislation overseeing CMOs [collective management organizations] is ineffective.” They both hope the government will explore these issues further with the proposed formation of an industry forum.