The UK Government have responded to a parliamentary inquiry into the economics of music streaming, and major recording labels and playlist curators are under fire.

Over the past year the parliamentary DCMS Committee has have been looking into the economics of music streaming. Is the system is a fair and sustainable one? The UK Government has just responded to the report, praising the inquiry’s efforts, and saying there’s more work to be done to gain a deeper understanding of the problems artists face in the digital streaming age.

Most markedly, the government have referred major music groups to the UK’s Competition and Market Authority (CMA) competition regulator, asking it to look into conducting a market study of the major labels’ dominance of music streaming. The competition regulator will now consider investigating Sony Music, Universal Music and Warner Music to see what economic impact the majors have on the music industry.

Before we get carried away, nothing’s been ruled out, but nothing’s been tipped to definitely happen either. The government is recommending investigations – as “more targeted research and evidence is needed before the Government can decide what action it should take on some of the issues highlighted.”

So there’ll be a new research programme, and these things take time. There’ll be assessments over the next year, getting ready for the next stage of examining the data.

So what are the key takeaways for artists?

One thing the response was clear on was that because of streaming, music lovers have access to more tracks than ever before in recorded music history, and more creators are able to release songs than ever before. (That’s thanks to the support of independent artists by the likes of RouteNote).

The government wants more research to be conducted – for example, into ensuring a fairer share of the pie for songwriters and composers to get paid.

Other recommendations include establishing a “music industry contact group” of senior representatives from across the music industry, to discuss reforms such applying equitable remuneration to streams to ensure a fairer split between label and performer. They also want more education programmes around issues such as music copyright, so artists know exactly what rights and royalties they’re entitled to.

Julian Knight, MP and Chair of the DCMS Committee, said: “Ministers have accepted a key recommendation to refer the dominance of the major music groups to the Competition and Markets Authority.  Our report laid bare the unassailable position these companies have achieved. We provided evidence of deep concern that their dominance was distorting the market.

“Within days we expect to see the Government’s own research published into the pitiful earning of creators in this digital age and hope it will corroborate what artists and musicians told us. We will be monitoring the outcome and what tangible steps the Government pledges to take to redress this unfairness and reward the talent behind the music.”

In a related move, the CMA is also looking into the competition fairness of Sony’s acquisition of AWAL.

Playlist curators on streaming services like Spotify are also being scrutinised by the government, who asked for further evidence to see how curators who are paid to recommend can be regulated. Payola isn’t regulated by Ofcom like on the radio, and there’s also the potential issue of major labels getting dibs on their music getting on the big Spotify playlists. 

Meanwhile in related news, a hefty report Music Creators’ Earnings in the Digital Era commissioned by the Intellectual Property Office, has just been published and hailed as “the most comprehensive study of music creators’ earnings ever completed in the UK.” The report was already taking place before the government’s streaming inquiry began, and the IPO has been gathering data about how artists make money from music streaming.

While the IPO don’t buy the argument that streaming services and labels are fleecing artists, they recognize that artists have to have music-related income from elsewhere other than streaming to survive on music alone.

The 224-page Creators’ Earnings report will almost certainly inform the next steps the UK government take in reforming the music industry in the age of streaming.

Anything that encourages discussion of improving the situation for independent artists is a positive step forward in the streaming saga. At RouteNote we’ll be keeping our eyes peeled as the process continues, hopeful that the next months bring good news tipping to balance towards indie artists, so that unsigned musicians and producers can be fairly rewarded for making amazing music.