INDIE LABELS WINNING WITH STREAMING

Indie labels worldwide have seen a 73% increase in payouts from music streaming year-on-year, according to Merlin CEO Charles Caldas, whose network of labels received $232m from services like Spotify and Apple Music in the year to March 2016.

Caldas revealed the figures, taken from Merlin's 2016 member survey, yesterday at A2IM’s annual meeting in New York.

Digital accounts for more than 50% of overall revenue for members surveyed, with one in three reporting over 75%. Streaming is the primary source of digital revenue for almost half (46%) of Merlin members—up from one-third last year.

Global consumption is a vital factor in the rise of money earned from streaming with 39% of respondents reporting that over half their digital revenues came from outside their home territory, with just 16% reporting the same for physical.

Comparing March 2016 with March 2015, the volume of audio streams reported to Merlin increased by 80%. In March this year alone, audio tracks by Merlin’s members were streamed more than 4bn times, up from 2.5bn in March 2015.

Furthermore, consumers that pay for a music streaming subscription are more likely to stream indie music, according to Merlin’s analysis of over 11.5bn audio streams from Jan.-March 2016. Usage of its members’ repertoire was 27% higher on paid streaming tiers, compared to free ad-funded tiers.

Said Caldas: “2016’s survey offers yet more evidence that Merlin’s independent record label members continue to grow and break new ground in the digital space. Over successive years we have seen audio streaming revenues surge for the vast majority, and it is particularly heartening to see members capitalize on consumer demand in new or previously untapped international markets. The digital business is a global business, and Merlin members are at the heart of it.”

Despite continued transition in the digital music market, the majority (65%) of Merlin members report overall business growth—the same percentage as last year. And 79% of respondents state they are “optimistic” about the future of their business.

Naturally, downloads are declining, but are still the primary digital revenue source for 28% of respondents—down from 41% in 2015. Here's that nasty "value gap" again; for 64% of those surveyed, video-streaming platforms like YouTube account for less than 10% of overall digital revenues.

Merlin’s 700-strong membership commands over 12% of the global digital recorded music market across more than 20k labels. Those include Beggars Group, Domino, Epitaph, Kobalt Label Services, Merge, Ninja Tune, [PIAS], Secretly Group and Warp Records.