IMPALA warns of streaming inequality as platforms favour scale over diversity

In a new report titled Combating the Emergence of a Two-Tier Music Streaming Market, the group warns that recent industry developments are favouring major rights holders at the expense of independent labels and artists, despite global streaming revenues surpassing $22 billion, driven by over 800 million premium subscribers.

Co-authored by industry experts Dan Fowler and Katherine Bassett, the report outlines how market consolidation, platform opacity, and emerging monetisation practices are widening the gap between large corporate entities and smaller independent players. IMPALA argues that current trends risk entrenching a system that rewards scale rather than creativity or diversity, undermining the sustainability of independent music.

Revenue drains from independent artists

Among the report’s most pressing concerns is the growing use of de-monetisation thresholds and royalty boost mechanisms on streaming platforms, measures introduced to combat fraud and incentivise engagement. However, these changes have disproportionately impacted independent artists, with some labels reporting that up to 70% of their catalogue was de-monetised overnight. The resulting lost royalties, IMPALA says, are being redistributed to larger rights holders.

Further criticism is levelled at tools such as Spotify’s Discovery Mode, which allow artists to pay for increased algorithmic visibility. These pay-for-play systems lack transparency and are predominantly marketed to independent creators, raising concerns about fairness and effectiveness.

Technology, oversupply, and AI disruption

The report also warns that the rise of generative AI music and ongoing streaming fraud are depleting royalty pools and devaluing human-made works. Combined with an oversaturated market, fuelled by low barriers to entry and a flood of low-quality uploads, legitimate artists are facing a weakening position within the digital economy.

Meanwhile, continued consolidation by major labels, including the acquisition of independent distributors and exclusive deals with digital service providers (DSPs), is giving dominant players greater control over industry standards and market terms.

Opaque systems and unfair thresholds

The report notes that genres such as classical, jazz, regional, and non-English-language music are especially vulnerable to these shifts, due to algorithmic biases and declining platform support. Emerging artists are also severely affected, as arbitrary monetisation thresholds add friction during the most financially precarious stage of their careers.

The lack of transparency around how DSPs calculate royalties and prioritise content only worsens the situation, leaving independents in the dark while larger players benefit from preferential treatment.

Key findings and recommendations

IMPALA benchmarks the sector’s progress against its 10-point plan for streaming reform. While there have been modest advances in areas like subscription pricing and environmental sustainability, the report finds regression in market transparency, equitable access, and support for local and diverse repertoires.

To reverse these trends, the report recommends five key actions:

1. Tackle AI dilution and fraud through coordinated industry regulation.
2. Reform royalty models to ensure fair revenue distribution and adjust subscription fees to match inflation.
3. Improve transparency around platform algorithms, monetisation thresholds, and playlisting tools.
4. Curb further consolidation to preserve a competitive, diverse market.
5. Embed consultation processes into all future platform and policy changes.

IMPALA concludes that unless urgent reforms are implemented, the future of music streaming will be determined by economic leverage rather than artistic innovation. The organisation urges music professionals to demand greater transparency, fairness, and collaboration from DSPs to ensure a truly inclusive and sustainable ecosystem.

The full report is available here.