“It’s going to be a hell of a lot quicker than the first billion,” Merlin CEO Charles Caldas told Music Week recently when asked how soon the global rights agency would distribute a further $1 billion (£762 million) to members.
True to his word, Merlin is already halfway there as is revealed a $500m (£381m) payout for the past 12 months (July 2017 to June 2018) to coincide with the 10th anniversary Impact Report. To put that in context, it took Merlin a decade to hit the first billion dollars last summer.
Indie repertoire has been benefiting from the streaming boom as new territories have opened up to labels including Latin America and South East Asia. Over the last three years, revenues from Asian markets have increased almost eightfold, while for Latin America the increase is tenfold
Merlin now licenses more than 20,000 independent labels across 55 territories. Collectively, they account for more than 12% of the global digital recorded music market.
The report reveals that payouts to Merlin members have increased almost 12-fold since 2012.
Execs in the indie sector have often identified the opportunity from premium subscription. Based on analysis of more than 500 billion streams from May 2014, Merlin confirms that its members perform 25% better in market share terms on paid tiers compared to free.
The opening up of global markers means that 42% of Merlin members receive over half their digital revenues from consumption outside their home territory (compared to 18% who pass that threshold for physical sales).
Over two thirds of Merlin members report that audio streaming accounts for the majority of revenues – in 2014 that figure was just 20% In March 2018, the expanding Merlin team processed an average of 14 billion streams per month.
There’s no sign that the market has peaked with 74% of members reporting that total business increased in 2017. When surveyed, 78% of members reported they were optimistic about the future of the business.
Indies are not only thriving in the new market, we are leading it
Charles Caldas
Charles Caldas said: “The advent of music streaming has transformed how independent labels operate, and how digital services perceive the value of our rights. Where once we were fragmented, we now act in unison. Where we were treated inequitably, we sit at the head of licensing discussions. Indies are not only thriving in the new market, we are leading it.
“This situation hasn’t occurred by accident and Merlin has, I believe, played a significant role in our progress. I certainly hope this Impact Report provides at least some flavour of what we’ve achieved in the past decade and a trajectory of where we’re heading.
“Had you asked any of our founding board members in 2008 whether they’d anticipate Merlin distributing over $500m per year, or that we’d open new global markets in Latin America, Asia and China, I suspect they’d have laughed you out of the room. But that’s where we are, and what we’re building upon. And most exciting of all, it feels like we’re only getting started."
As exclusively revealed by Music Week, Merlin has already processed payments to members from the proceeds of the sale of its Spotify equity stake.
Merlin’s members include Beggars Group, Secretly Group, Domino, Sub Pop, Epitaph, Anti Records, Entertainment One, Redeye Worldwide, !K7, Kobalt Music Recordings, PIAS, Merge, Warp, INgrooves and Hopeless Records.
It has offices in London, New York and Tokyo, with a head office in Amsterdam.
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