An ongoing competition probe into the music streaming industry has found that neither labels nor streaming services are making sustained excess profits.

The Competition and Markets Authority pledged to examine the market in January, specifically focusing on potential harm to consumers but also whether any lack of competition between music companies could affect musicians, singers and songwriters.

Delivering its initial findings, it said that against the backdrop of 138 billion overall streams in 2021, one million streams per month could earn an artist just £12,000 a year.

However, despite the three major record labels – Sony BMG, Universal Music Group and Warner Music Group – playing a key role in the recorded music sector, the evidence suggested that this concentrated market does not currently cause consumers harm or drive concerns raised by artists. 

“Neither labels nor streaming services appear to be making sustained excess profits,” stated the CMA.

Recorded music revenues reached £1.1 billion in 2021, with 80% of recorded music now listened to via streaming services. Listeners have access to a huge choice of music for a fixed monthly subscription fee. 

The CMA found that these fees have fallen in real terms, and that access to a wide range of music – old and new – means older songs can more easily get a new lease of life and find new audiences: 86% of streams in 2021 were for music over a year old.

Digitisation has also made it easier than ever for artists to record and share music, and find an audience. The number of artists streaming music doubled between 2014 and 2020, from around 200,000 to 400,000.

However, the market remains challenging for many creators. “The industry’s income is broadly stable, but more artists are offering more music. As has always been the case, while a small number of high-profile artists enjoy huge financial success, the large majority do not make substantial earnings,” said the CMA.

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Sarah Cardell, its interim chief executive, said: “Streaming has transformed music. Technology is opening the door to many new artists to find an audience and music lovers can access a vast array of music, old and new, for prices that have fallen in real terms.

“But for many artists it is just as tough as it has always been, and many feel that they are not getting a fair deal. Our initial analysis shows that the outcomes for artists are not driven by issues to do with competition, such as sustained excessive profits.”

The CMA says it is keen to hear views on its initial findings before 19th August to inform its final report.