Business News Digital Labels & Publishers

Merlin members see streaming revenues boom

By | Published on Friday 17 June 2016


Merlin’s 700 odd indie label members are seeing increasing financial benefits from streaming, says the digital rights agency’s annual survey. The organisation’s CEO Charles Caldas revealed the results yesterday at US indie label trade body A2IM’s AGM.

In the year up to March 2016, Merlin members have seen streaming revenues increase by 73% year-on-year to $232 million. 46% of the labels surveyed said that streaming and subscription services were now their primary source of income, up from around a third last year. Meanwhile, 62% said that digital overall accounts for more than 50% of their business, and for a third of respondents it is over 75%.

Digital is also giving greater access to international markets as well, with 38% saying that more than 50% of their digital revenues come from outside their home territory, compared to 16% for physical. All of which accounts for 65% of members saying that their businesses grew in the last year, and 79% saying that they are optimistic about the future.

But don’t go thinking these results were all chirpy and happy. Just 28% said that downloads were their primary income stream now, down from 41% in the 2015 survey, showing the steepness of the decline of that format. And would it be a music industry statement without a bit of a YouTube kicking? No, it would not. 64% of respondents said that video streaming platforms accounted for less than 10% of digital revenues, which Merlin says shows that video platforms are “falling short of potential”.

The research also found that usage of Merlin members’ music on audio streaming services is 27% higher on paid tiers compared to ad-funded, with freemium and premium set-ups together accounting for 11.5 billion streams.

Caldas said of the results: “2016’s survey offers yet more evidence that Merlin’s independent record label members continue to grow and break new ground in the digital space. Over successive years we have seen audio streaming revenues surge for the vast majority, and it is particularly heartening to see members capitalise on consumer demand in new or previously untapped international markets. The digital business is a global business, and Merlin members are at the heart of it”.

This is all well and good, of course, but the streaming services themselves all remain loss-making enterprises. As revenues from these companies become more and more important to the labels, the need to push them into profit grows greater.

Merlin’s report follows the publication of research carried out by the Worldwide Independent Network, showing that independent labels represent a much higher share of the recorded music market than is generally reported in official industry figures.