Global digital rights agency Merlin has revealed a 63% year-on-year increase in member payments (April 2018 - March 2019) to $845m – an amount including more than $130m in revenues from settlements and other non-royalty income such as proceeds from the sale of Spotify shares.
The results were announced as part of its 2019 Membership Report & Survey and take the overall amount paid to independent labels and distributors worldwide to in excess of $2bn since it opened for business. The $2bn landmark was passed in February 2019, and comes 18 months after Merlin announced its first $1bn in payments.
According to an official press release, Merlin has added 141 companies to its membership in the past 12 months, and now represents independent music businesses across 63 countries.
Speaking about the results, Charles Caldas, CEO, Merlin, said: “I am delighted to report another record-breaking increase in payments to our global membership. What’s particularly gratifying is the inclusion of more than $130m in monies that members would not have captured were it not for Merlin’s formation. These are significant revenues that underline the incremental value Merlin brings to our global membership.”
Caldas continued: “That we can deliver such payments is testament both to the collective strength of our members’ repertoire, and Merlin’s ability to deliver best-in-class licensing alongside fully equitable and transparent reporting and payments. It means Merlin’s members can report quickly and accurately to their artists and clients, that they can thrive as truly independent businesses, and invest even further in the creation and development of new music.”
These are significant revenues that underline the incremental value Merlin brings to our global membership
Helen Alexander, CFO, Merlin, added: “It’s an absolute priority for Merlin that our reporting is transparent and fully attributable, and especially so given the increases in non-royalty income. This is no small undertaking, but it ensures our members can understand what they’re being paid - and why. For instance, every cent that Merlin received from the sale of Spotify shares was paid out quickly, pro-rated on a track-by-track basis, and with 100% transparency.”
The report also presents results from Merlin’s 2019 member survey, with data collected from independent labels and distributors in 35 countries across five continents.
One of the key findings was that 81% of respondents stated their overall business revenues had increased in 2018 - with 30% stating that overall business was up by more than 50%. In previous member surveys, an average of 67% of respondents said their total business revenues had increased the previous year.
Perhaps unsurprisingly, another takeaway was that streaming continues to drive digital income with more than half (54%) of Merlin members reporting that digital income currently accounts for more than 75% of their overall business revenues compared to 39% in their 2018 survey. Approximately half of the survey’s respondents (49%) stated that audio streaming is responsible for over 75% of their digital income - up from 37% in 2018.
In contrast, the dynamics around video streaming practically unchanged from member surveys stretching back to 2014, with 79% of respondents saying that video accounts for less than 25% of their digital income.
Every cent that Merlin received from the sale of Spotify shares was paid out quickly, pro-rated on a track-by-track basis, and with 100% transparency
Merlin members also pointed to key areas for global expansion, with 15% of respondents believing that China offers the greatest potential, despite fewer than 0.5% of Merlin members having their primary business based in mainland China. According to an official press release: “Outside their home territory, 32% of non-US members believe the USA offers the greatest potential for increased digital consumption of their repertoire.”
In 2018, Merlin agreed landmark non-exclusive partnerships with Chinese DSPs NetEase, Alibaba and Tencent. Meanwhile, the affinity for Merlin members’ repertoire across Latin America continues, with Brazil currently Merlin’s fifth most valuable territory and Mexico inside the Top 10.
Last month, Merlin announced the appointment of Akira Nomoto as general manager of Merlin Japan. Nomoto arrived from Spotify Japan, where he served as head of artist & label marketing and subsequently director of licensing and label relations.