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Merlin annual revenue doubles to $89m

Tim Ingham
Merlin annual revenue doubles to $89m

Merlin, the global rights agency for the independent music sector, has seen its year-on-year revenues (May 2013-April 2014) double to $89m (£52m), as it reveals that digital income now accounts for more than 50% of business for the majority of indies.

And there's more good news: the agency’s projected payouts to its members over the next 12 months are now expected to exceed $160m (£94m). 

In the results of a new annual member survey that accompany its fiscal announcement, the company today revealed that in April 2014, audio tracks owned by Merlin members were streamed more than 1.4 billion times - more than double the number streamed in April 2013.

Other key findings from the survey, which drew on anonymised responses from independent members across 29 countries, were:

  • Independent music outperforms on streaming services: usage of Merlin members music on streaming services continues to outperform their share of the wider digital market by 10-20%. The trend is even more pronounced on premium paid-for subscription tiers, where usage was almost 30% higher than on free ad-funded tiers 
  • Streaming drives digital growth: for almost half of its survey’s respondents, digital income now represents more than 50% of their overall business; for 1 in 5 Merlin members, streaming accounts for more than 50% of this digital income;  73% are optimistic for the future of their businesss.
  • However, video-based platforms still contribute less than 25% of digital revenues for the vast majority (84%) of respondents.

Repeating analysis from last year, which compared usage of Merlin members’ music on streaming services with their share of wider digital market, Merlin said independent repertoire continued to outpace the rest of the market on services like Spotify, Beats Music, Deezer and Rdio - eclipsing the independents’ market share of digital album sales by margins of between 12% and 20%, depending on label and territory.

This trend is even more even more pronounced on premium paid-for tiers. Drawing on an analysis of 5bn audio streams (Jan-April 2014) usage of Merlin members’ repertoire was almost 30% higher when accessed on paid streaming tiers compared to free ad-funded tiers.

When comparing usage in the month of April 2013 against April 2014, the volume of audio streams reported to the agency by leading music services has increased more than 2.5 times.

Between 2012-13, almost half of respondents (47%) reported increases in streaming revenue of more than 50%. In the same period, despite signs of a slowdown in a la carte download sales – 54% of respondents reported an increase in a la carte sales, compared to 64% in 2011-12 – over 75% of Merlin members reported that their total digital revenues had increased.

When questioned about their current revenues, almost half (48%) of respondents said that digital income now accounts for more than 50% of their overall business. For more than 1 in 4, digital income now accounts for more than 75% of their total business - significantly outpacing the industry average.

90% of respondents said that membership of Merlin was important to their business.

Commenting on the findings, Merlin CEO Charles Caldas (pictured) said:

“The Merlin member survey and analysis provide a unique and illuminating snapshot of how independent labels are leading the way in the transformation of the global music market. 

“It is now abundantly clear that the new dynamics offered by streaming platforms are well suited to the independent sector. Consumers have been liberated from the tightly controlled storefronts of the past. As a result, the ability to discover, explore and share new music has been greatly enhanced.  

“Independent labels have long enjoyed an increased market share for sales of digital albums, but we are seeing that usage of indie repertoire on streaming services is even more pronounced. And particularly so on paid-for premium tiers that attract the most committed and discerning fans.

“The most successful services are those that have understood these dynamics and treat our sector with parity and respect.

“This transition is not without its challenges. For many labels, managing the transition from unit sales to access will be a strenuous process, and there are significant concerns about consolidation and predatory behaviour in the wider music and technology sectors. However, we are confident that despite the challenges to the value of their music, independents will continue to thrive in the digital space.

“As evidenced by the unprecedented success of independent labels in the charts around the world, consumers are finding a broader, more compelling choice of music than ever before. And pleasingly, much of that is coming from our labels.”

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