•  
  •  
 

The University of Chicago Business Law Review

Start Page

290

Abstract

The music industry is highly concentrated at multiple stages along the production chain between the Big Three music group conglomerates (Universal, Sony, and Warner) and the three largest streaming services (Spotify, Apple, and YouTube). The Big Three and the streaming services have extensive vertical arrangements, from the Big Three having ownership stakes in the largest streaming services to their contracts for the streaming services’ algorithms to prioritize Big Three artists. This resembles historical radio era payola arrangements. This double layer of market concentration and the arrangements between music production and distribution primarily harm musicians, who lack the bargaining power to negotiate for better contracts or terms with either the Big Three or the major streaming services.

This Comment evaluates the reasoning behind, and outcomes of, radio era payola arrangements, compares these historical arrangements to the modern digital streaming era, and considers modern payola in the context of recent trends in antitrust law jurisprudence. Congress’s solution of required disclosure for radio era payola largely failed to substantially improve access to the radio for smaller artists and labels, and would likely fail again if attempted for the modern music streaming distribution system. In recent years, however, courts and regulators have utilized an increasingly holistic antitrust analysis with a growing focus on labor-side harms and vertical integration. The growing openness to labor-side concerns and the heightened scrutiny recently placed on vertical integration should weigh heavily in favor of musicians and independent labels in courts’ rule of reason analyses. These newly emphasized concerns provide new lenses for analyzing the modern music industry structure and payola and suggest a solution to Congressional inaction.

Download

Included in

Law Commons

Share

COinS