Streaming boosts major growth in indies’ revenue, Merlin says

Audio streaming is fast becoming an important revenue source for the global independent sector, Merlin CEO Charles Caldas will report today at the A2IM General Meeting in New York.

Audio streaming accounts for the majority of their digital revenues for nearly 64% of the global rights agency’s 700 members. This marks a significant turnaround since 2016 when that figure was 46%.

But there’s only been negligible revenue growth from video, with audio streaming outpacing it at a rate of 3-to-1.

In a statement underlining the need to address the “value gap” problem, 42% of Merlin members complained that services like YouTube only account for 5% of their digital revenues.

The boost in audio streaming revenue saw Merlin’s revenue distributions to its record label members rise 52% in the period between April 2016 and March 2017 to US$353 million.

Merlin reported, “Within the space of four years, revenues paid out to Merlin members have increased more than eightfold.”

Digital now accounts for over half of total business revenues for 67% of Merlin members, up from 55% two years ago.

For 39% of members, digital accounted for over 75% of their total business financial intake.

Audio streaming also seems to be the key to new international opportunities for independent music.

Merlin says that 42% of its members report that over half their digital revenues come from outside their home territory.

By comparison, only 17% reported the same for physical revenues.

“Over the past 12 months, we have witnessed a great leap forward,” Caldas said.

“Audio streaming is now dominating Merlin members’ digital business, and we are continuing to see the vast majority of our independent labels thrive under what are very different market dynamics.

“As a global-facing agency, it is especially pleasing to see such consistent international growth, and the continuing over-performance of Merlin-licensed repertoire on paid subscription tiers.

“Clearly, the labels we represent and the artists they support hold a unique value to music fans the world over.

The only relative step backwards is the industry-wide underperformance of video-streaming. If we can address this market anomaly, then the uplift across the business would be enormous.”