The British anti-trust regulator will carry out work to consider and develop the final scope of the market study, before formally launching it as soon as possible.
In a statement, the CMA said it has written to the government and the Digital, Culture, Media and Sport Committee to outline its intended next steps.
"The UK has a love affair with music and is home to many of the world's most popular artists. We want to do everything we can to ensure that this sector is competitive, thriving and works in the interests of music lovers," the UK watchdog said in a statement.
On the music streaming front, European Union regulators are a little ahead of their counterparts in the UK - back in April the Competition Commission charged Apple with an antitrust breach related to competition in the music streaming services market.
On the music streaming front, the European Commission in April issued a formal 'statement of objections' against Apple, saying that Apple's app store rules distort competition in the market for music streaming services.
Swedish music streaming giant Spotify had long complained about Apple's terms and conditions being 'unfair'.
According to the British watchdog, over the past decade, the music industry has evolved almost beyond recognition, with streaming now accounting for more than 80 per cent of all music listened to in this country.
"A market study will help us to understand these radical changes and build a view as to whether competition in this sector is working well or whether further action needs to be taken," said Andrea Coscelli, CEO of CMA.
The CMA has a number of ongoing probes promoting competition in digital markets. These include investigating Google's 'privacy sandbox', Facebook's use of ad data and Apple's App Store.