House Of Commons Digital, Culture, Media And Sport Select Committee Publishes Report Into The "Economics Of Music Streaming" Calling For A "complete Reset" To Fairly Reward Performers And Creators



The Committee says that services that host user-generated content (UGC) gain significant advantage on copyright, with YouTube emerging as a dominant player.
UK Media, Telecoms, IT, Entertainment
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The Report into the "Economics of music streaming" recognises that, following over a decade of digital piracy, music streaming has returned the recorded music sector to growth and is now the dominant mode of music consumption for consumers in the UK and globally. Real-terms revenues from recorded music, however, are far below the levels seen in previous decades.

The Report finds that comprehensive reform of legislation and further regulation is needed, not only to redress the balance for songwriters, performers and composers, but to tackle what it calls fundamental problems within the recorded music industry. The Report warns that steps should be taken to ensure that UK law is not enabling the outcome of market dominance by major music companies, with a call for the Competition and Markets Authority to examine whether competition in the recorded music market is being distorted.

The Committee says that services that host user-generated content (UGC) gain significant advantage on copyright, with YouTube emerging as a dominant player. It identifies that YouTube's dominance of the music streaming market shows that the market has "tipped", that the 'safe harbours' give services that host UGC a competitive advantage and undermine the music industry's leverage in licensing negotiations, which in turn has suppressed the value of the digital music market both in real and absolute terms.

The Report says that, through streaming consumers can enjoy music that is low in price, personalised and readily available, but streaming's short-term pricing structure puts music at risk in the long-term.

The Report also recognises that the Government must ensure that copyright law is fit for purpose and that appropriate mechanisms are in place for rightsholders to enforce their rights, including where rightsholders believe that their rights are being systematically infringed.

Key findings and recommendations:

  • Government should legislate so that performers enjoy the right to equitable remuneration for streaming income;
  • Government should refer the case to the CMA to undertake a full market study into the economic impact of the major music groups' dominance; and
  • Government should introduce robust and legally enforceable obligations to normalise licensing arrangements for user generated content-hosting services, to address the market distortions and the music streaming "value gap".

To read the Committee's press release in full and for a link to the full Report, click here.

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