The latest WINTEL report has revealed that growth in the independent sector outpaced the overall market last year as the indies’ global share almost hit 40%.
The results, gathered from 33 countries, are described as the most comprehensive assessment of the global independent record label sector ever compiled. The Worldwide Independent Network (WIN), which issued the report, is the coordinating body for national independent trade associations representing the recorded music industry.
Now in its third edition, WINTEL maps the global market share of the independent sector based on copyright rather than distribution. This research shows that independents increased their global market share from 39.6% in 2016 to 39.9% in 2017.
The original 2016 result of 38.4% has been revised up based on new data for self-releasing artists’ revenue, which grew from $94 million (£73.7m) in 2016 to $101m (£79.2m) in 2017. The DIY sector has expanded with companies, including AWAL, Ditto, Absolute and the majors, offering a range of services to artists.
According to WINTEL 2018, global revenues for the indies were up from from $6.2 billion (£4.9bn) in 2016 to $6.9bn (£5.4bn) in 2017, an increase year-on-year of 10.9%. In comparison, the major labels’ revenues grew by 9.7% in the same period.
The independent sector outperformed the overall music market, which grew by 10.2% last year.
Earlier this year the IFPI noted the emergence of China as a Top 10 market, while global digital rights agency Merlin has reported on the rise of streaming revenues in China and Latin America.
WINTEL confirms the trend with China experiencing a 36% rise in revenue growth, while Asia & Australasia had a 5.4% increase in revenue and streaming growth of 38%. Latin America surged ahead with overall growth of 17% and an almost 50% rise in streaming revenues.
By the end of 2017, the report found that music streaming subscription services had 176 million combined subscribers globally, up from 64 million in 2016. As a result, streaming revenues for independent companies grew by 46% in 2017 to $3.1bn (£2.4bn). Streaming now accounts for just under 44% of the sector’s overall income, compared to 33% in 2016.
Indies have taken advantage of the streaming environment, with 47% of respondents stating that it has significantly improved their cash flow. That figure rises to 73% for labels where streaming is already more than 30% of their revenues.
This year’s survey for WINTEL also found that 76% of artists signed to independent labels choose to renew their contracts at the end of the term. Responses also revealed that 42% of staff at independent companies have remained there since launch. The average label now has 13.6 full-time staff, 3.2 part-time staff and 97.6 artists in their catalogue.
It shows that the indies are forging great bonds with those they represent
Alison Wenham
Alison Wenham, CEO of WIN said, “As 2018 draws to a close, we are delighted to publish the third edition of the annual WINTEL report, which highlights the global independent market share increasing to an astounding 39.9% in 2017 - a figure that outstrips both the major labels and overall music sector. There are numerous interesting outcomes from this survey but one thing that really stood out for me is the fact that 76% of artists are choosing to renew their contracts with their labels, which shows that the indies are forging great bonds with those they represent.
“It has been another turbulent 12 months for our industry on a lot of levels but we have emerged with the prospect of powerful new legislation to protect our businesses, fantastic growth in some unexpected territories and increasing support from music fans who have continued to enjoy and engage with the amazing music coming out of the worldwide independent community.”
Martin Mills, founder of the Beggars Group and chairman of WIN, said: “With two out of every five ‘purchases’ of music going to the independent sector, now may be a good time to draw breath and celebrate this incredible achievement. In an era in which diversity of all kinds is prized, yet consolidation is the norm, for a cultural sector such as music to achieve such remarkable diversity of both art and business models is truly extraordinary, and due in no small part to our ability to be strong together through our collective organisations.”
The focus in the report on copyright as the basis with which to measure market share means that indies’ revenues are recognised even when they partner with a major for distribution. WIN argues that any claiming of this market share by the majors would distort the true picture. The distribution by companies backed by majors accounts for 8.6% of the total market and 22.2% of the independents’ market share.
See the latest issue of Music Week for our interview with Alison Wenham and more WINTEL coverage.
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