Independents digital agency Merlin extends Spotify deal

Merlin, the global digital rights agency for independents, has extended their nine-year partnership with Spotify with a new multi-year license agreement.

The relationship has been a successful one: Merlin research from 2016 found that streaming is now the primary source of digital revenue for almost half (46%) of the 20,000 indie labels from 51 countries that the agency represents.

These labels command over 12% of the global digital music market – on par, Merlin points out, with a smaller major. Merlin is Spotify’s fourth largest partner.

Streaming has given indies more of a level playing field than any other format, and break into more new territories.

Spotify is available in 60 countries, with 100 million active users and 50 million subscribers paying for its 30 million tracks.

Digital music has been a massive growth factor for the independent sector.

Almost two thirds (62%) of members who responded to Merlin survey revealed that digital now accounts for more than 50% of their overall business revenue. For 1 in 3, it accounts for over 75%.

The new Spotify agreement is set up not only to continue to reflect and promote the value of independent music, but also improves marketing and advertising opportunities and enhanced access to data.

Member labels can also participate in Spotify’s recently announced flexible release policy.

These labels include, alphabetically, Armada Music, Beggars Group, Domino, Entertainment One, Epitaph/Anti, Hopeless Records, Kobalt Music Recordings, Mad Decent, Naxos, [PIAS], Secretly Group, Sub Pop and Warp.

Merlin represents the most valuable catalogue outside that of the three majors.

Merlin CEO Charles Caldas said: “Merlin was a launch partner to Spotify back in 2008, and our partnership has thrived ever since.

“This new agreement lays the path to future sustainable growth for us both, and we look forward to remaining an integral part in the service’s continued success.”

The agency’s Chairman Martin Mills, added: “I’m delighted that Merlin has reached this new agreement with Spotify.

“We’ve been great partners for each other, and this updated arrangement allows independents in the Merlin community the comfort of knowing they have a highly competitive deal and parity of access to the service, whilst creating a commercial environment in which Spotify can grow to the benefit of all of us.”

Spotify co-founder and CEO David Ek tweeted, “Indie music has been a huge part of our success since day one & I am super happy to say we have a new, multi-year deal w/ @merlinnetwork”

According to Merlin research, consumers paying the most for music are also consuming the most independent music.

Aggregated across billions of streams, Merlin member repertoire performed 27% better on the paid tiers of streaming services versus free ad-funded ones.

Streaming revenue to Merlin label members increased by 73% year-on-year to US$232 million.

Digital music allows indies to break into new global markets. 39% of Merlin label members found that over half their digital revenues came from outside their home countries. The figure was just 16% for CDs and vinyl, or physical format.

The volume of audio streams reported to Merlin in March 2016 was up 80% from March 2015, to 4 billion from 2.5 billion.

Since commencing operations in May 2008, Merlin has licensed key digital services including SoundCloud, YouTube Red, Spotify, Pandora, Google Play, Deezer, Vevo and KKBOX.

But Caldas last year told an indies conference in London, “YouTube proudly proclaims they have a billion viewers. Spotify just announced that they have reached 100 million users.

“When we bank that cheque every month, the cheque from YouTube is less than a tenth of the cheque that we bank from Spotify, regardless of that disparity in user numbers.”