Merlin CEO Charles Caldas has told Music Week that the organisation’s new licensing deal with Spotify, which will allow its member labels to window releases, will enable indies to go “toe-to-toe with majors” in the streaming market.
The deal, which was announced last week, follows a similar agreement between the streaming giant and Universal Music Group, whereby artists can release new albums exclusively on Spotify’s premium tier for two weeks before being made available to those on free subscription.
According to Caldas, the multi-year contract will bolster the position of indie labels in the digital marketplace and introduce new listeners to independent releases.
“[The deal] positions us to continue to be able to compete toe-to-toe with the majors on a platform that’s been very good for our business and gives us all the tools we need to be able to do that,” Caldas told Music Week. “It’s a deal that gives us what we think is a significant opportunity to grow that business.
“The thing we enjoy about the streaming market and that’s been borne out of the research we do every year, is that the streaming platforms are positive environments for consumers to discover more independent music, and they have been doing so in increasing numbers,” he continued. “Having a deal like this, which we think is a competitive deal that puts us front and centre on the service, hopefully will allow us to grow at the maximum possible rate as the service grows.”
While Caldas declined to comment on the windowing opportunities available to Merlin’s label members, he did highlight the multi-faceted nature of the new arrangement: “This deal is very much a package of things that will allow us to build our business on the platform over the term of this current deal.”
Merlin’s partnership with Spotify stretches back to the streaming platform’s launch back in 2008. Now, having worked closely with the service for nine years, Caldas believes that it is ideally placed to secure the best possible terms for indie labels.
“Merlin was created to make sure independents were competitive in the licensing of new generation digital services,” he commented. “We certainly wouldn't be doing any deals that we didn't think reflected the value of the rights. As the market matures, we’re more and more confident we can deliver the kind of value that is appropriate, given where we sit in the market. We are now Spotify’s fourth largest partner and the fourth largest partner for a lot of the other services we are in business with. Once you get to that position, the collective benefits we bring make it much simpler for platforms to license the music. It should be win-win on both sides.”
In addition to the new deal, Caldas also highlighted the benefits of the streaming market for indies, describing it as “a much more democratic environment” than the physical and download markets.
“Everything is available,” he said. “Independents recognised that very early and we’re very clever in finding ways to get that music in front of consumers. When you combine that with the fact that people on streaming platforms are generally hungry for music, it’s an environment that rewards exploration and discovery. Independents benefit from that.”
Spotify’s move to start windowing releases was seen as a breakthrough deal for the industry, after the streaming service had previously stood firm on its releasing stance - it famously fell out with US megastar Taylor Swift over its inflexible approach.
In a joint statement, the two companies claimed the deal would "advance their partnership to ensure that streaming realises its full transformational potential for artists, labels and fans by delivering a comprehensive range of music experiences".
This will include providing more flexibility for new releases, and collaborating on marketing campaigns across Spotify’s platform. The agreement will also provide unprecedented access to data, creating the foundation for new tools for artists and labels to expand, engage and build deeper connections with their fans.
Warner Music Group and Sony Music have yet to comment on whether or not they will be entering into similar windowing agreements with Spotify. Neither have responded to Music Week requests for comment.
