Music streaming antitrust action is unlikely; Apple Music has a 10-20% share

The UK’s antitrust watchdog said music streaming antitrust action is unlikely, despite the company being dominated by a small number of major players. Apple Music would be the third most popular service.

The Competition and Markets Authority (CMA) has declared that none of the companies involved were making excessive profits (an understatement if there ever was one!), and that consumers are not harmed by the limited choice of services…

The CMA report says music streaming services mean consumers have access to more music for less money.

Where before consumers typically owned a few CDs or vinyl records of their favorite artists, the rise of music streaming has given consumers easy access to vast catalogs of music spanning a wide range of genres and time periods for one low price. fixed monthly (or free, but with ads).

Recorded music now also costs consumers less than when CDs and other physical formats were more popular, with inflation-adjusted UK recorded music revenue falling by around 40% from £1.9 billion £1.1 billion in 2001 to £1.1 billion in 2021. […]

Today, more than 80% of music is listened to through music streaming services.

The report responds to a complaint from artists that they are paid far too little for music streams. The AMC found that revenues were very low. In one example, he showed that one million streams a month would only earn an artist around £12,000 ($14,400) a year.

However, he said this was mainly a function of the vast choice available to consumers, which meant that smaller artists inevitably received a small share of revenue. The AMC found that royalty rates and revenues were slowly increasing and the average royalty rate was 26%.

More creators than ever are releasing music – the number of artists releasing their music rising from around 200,000 in 2014 to 400,000 in 2020 […]

There has been a huge increase in the number of artists sharing their music and a huge returning catalog made available via streaming. This, coupled with the fact that there is only a limited amount of music a consumer can listen to and a relatively fixed pot of revenue from streaming, inevitably reduces the amount most artists can earn, even with higher royalty rates.

The report says Spotify holds 50-60% of the music streaming market, with Amazon in second place at 20-30%, followed by Apple Music at 10-20%. While the CMA says the numbers are based on the date of the official charts, the huge quoted ranges make it clear that the market shares are extremely rough estimates.

The report concludes that consumers are paying a fair price, but notes that switching service can be difficult due to the loss of playlists and other personalized data. He says it’s not a big problem today, but he expects music streaming companies to address this issue in the future.

Some nascent music data portability services support switching, but demand for them is currently low. While this is to be expected in a growing market and not necessarily a dynamic that causes immediate concern, as the market matures it would be concerning not to see more vigorous competition between streaming services and efforts increased to make it transparent for consumers. to change and port their playlists or music preferences.

Music streaming is an extremely difficult business to make money from. Spotify has operated at a loss for most of its life, and Beats co-founder Jimmy Iovine says there’s no money to be made.

“Streaming services are in a bad place, there are no margins, they’re not making money,” he said. “Amazon sells Prime; Apple sells phones and iPads; Spotify, they’re going to have to find a way to get that audience to buy something else.

However, Apple still faces music streaming antitrust issues: an EU investigation into a Spotify complaint found the iPhone maker gave its own music platform an unfair advantage.

FTC: We use revenue-generating automatic affiliate links. After.


Check out 9to5Mac on YouTube for more Apple news: