Merlin study showcasing the state of independent music presented in NY

Charles Caldas, the CEO of global rights agency Merlin which represents many of the world’s leading independent labels, detailed today in a keynote delivered in New York at A2IM’s Indie Music Week the results of a two month survey undertaken amongst its 627 members across 29 countries. These members represent 10% of the global digital music market.

The study addresses questions around the changes in the members’ digital business in 2012-2013 as well as a survey around their present work.

As far as the 2012-2013 period is concerned, 75% of members reported an increase in their digital revenues, with 20.7% reporting a 50% or greater increase. Only 12.8% saw their digital revenues decrease.

Streaming growth was even stronger. Whilst only 8.21% of respondents declared that their overall digital revenues had increased by over 100%, over twice that amount - 17.70% - declared a 100% or over increase in their streaming revenues.

A-la-carte download revenues held on with 54.59% of members indicating a growth in revenues in the 2012-2013 period, although only 13.53% saw an increase of over 50% and 23.67% saw a decline.

Moving on to the queries regarding the member’s present day business, interestingly when asked what percentage of the business digital represents today, we see results split pretty homogeneously across the board. 48.21% of respondents said that digital is now over 50% of their revenues and for the remainder 51.79% it was under 50%.

The fun part comes when comparing the different types of digital revenues. A-la-carte downloads still hold the lion’s share with 50.25% of members saying that they represent over half of their overall digital revenue. Second come streaming services: 19.9% of members indicated receiving over 50% of digital revenues from streaming and 35.86% placing that figure between 25 and 50%. Last are - no surprise - video streaming sites like YouTube, Vevo and Muzu. 83.84% of members stated that those services were responsible for less than 25% of digital revenues and only 5.56% said they were responsible for more than 50%.

These percentages are important in the light of the independent’s current fight with YouTube and by proxy Google, since it shows that as much as a potential ban from YouTube would certainly hit the label’s wallets, it would not substantially endanger their livelihood.

Members indicated the power of Google and the power of the majors as a significant potential threat to their business - Charles Caldas in a prior keynote delivered at AIM’s Music Connected event in London had already highlighted issues around breakage and other means by which majors are able to extract value from the revenue pie before it gets to the indies.

Finally Merlin also carried out a study with its own internal data around the importance of independent content for streaming services. The figures are impressive especially amongst paying users. From an analysis of 5 billion streams between January and April 2014 Merlin’s members repertoire was used almost 30% more when access from a paid streaming tier. In the US,

This goes to highlight the fact that even though Merlin’s members “only" represents 10% of the global digital music market - as pointed out by YouTube - when it comes to on-demand streaming services they are considerably more influential.

Streaming volumes and revenues are also set to double year-on-year reaching $89 million between April 2013 and April 2014 with the volume of audio streams increasing by 2.5%. Merlin now projects audio streaming revenue payouts for its members reaching $160m over the next 12 months.

(Andrea Leonelli)