Independent v Major Record Labels: Do They Compete on a Level-Playing Streaming Field?

Abstract

Major record labels have direct and indirect ownership in Spotify, which raises the obvious question: do major labels use their influence over music streaming to make it harder for their upstream competitors (independent labels) to compete. In search of evidence to answer this question, this note looks at the distributional properties of the number of times a song is streamed on Spotify. More specifically, we investigate whether there is a difference between the process that generates streaming numbers for UK based major label artists and for UK independents. We provide evidence of a difference in the power-law exponents of these two groups, and argue, using a set of simulations that this may be a result of the difference in the streaming growth process, caused by major labels' disproportionate access to Spotify-generated playlists.