The U.K. Parliament has opened an inquiry into the economic impact of the streaming music industry, with a focus on whether artists are getting their fair share of income from platforms such as Spotify, Apple Music, Amazon Music and Google Play.
With streaming accounting for more than half of the global music industry’s revenue, the probe, announced last week (Oct. 15), will examine the question of how policy can “favor more equitable business models,” according to a statement by Parliament’s Digital, Culture, Media and Sport (DCMS) committee, which is handling the investigation.
The inquiry raises the specter of further regulation of streaming and highlights the long-term debate over music streaming platforms. While services like Spotify, which is now operating in 92 markets, offer consumers convenience and give the music industry the ability to reach markets around the world easier than ever before, many artists struggle to make a living due to the low payouts per stream.
While music streaming accounted for more than £1 billion in revenue last year — with 114 billion music streams — artists can be paid as little as 13% of the income generated by streams, Parliament says.
“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,” says Julian Knight, the chair of the DCMS committee. “We’re asking whether the business models used by major streaming platforms are fair to the writers and performers who provide the material.”
The probe will look at how the streaming music industry could be limiting the range of artists and music that consumers can experience. Knight says that algorithms used by streaming services to recommend music to users may maximize income for the platforms but “are a blunt tool to operate in a creative industry with emerging talent risking failing the first hurdle.”
The U.K. is the third-largest music market in the world, and is the second-biggest in streaming, with $802.5 million in streaming revenues in 2019, up 21.8% from 2018, according to the IFPI.
Parliament is asking industry experts, artists, record labels and the streaming platforms themselves to assist in the investigation by submitting written statements through Nov. 16.
As part of the same inquiry, the committee says it will also look at whether the government should take action to protect the music industry from piracy in the wake of steps taken by the EU on copyright and intellectual property rights.
This isn’t the first time that Parliament has taken on the music industry. Last year, the DCMS released findings of a two-year-long probe into the live music market that included a warning to the public not to buy or sell tickets through secondary ticketing site Viagogo. The report also contained evidence of discrimination against hip-hop acts over “unfounded” fears over licensing and safety.
Viagogo, which had snubbed investigators by refusing to allow its executives to appear before Parliament, nevertheless made a number of changes to comply with U.K. law after the report was released and a long-running court action was dropped in September of 2019.
In February, London-based Viagogo completed an acquisition of larger rival StubHub for $4 billion. But in June, the U.K. government’s Competition and Markets Authority opened an investigation into the merger that could result in Viagogo having to divest all or part of the business.