In the opening keynote of the CMU Insights-programmed Great Escape convention this morning, the CEO of Merlin, Charles Caldas, announced the results of a new survey of the group’s members, as the indie labels’ digital rights agency turns five years old. The organisation represents over 20,000 independent labels and distributors from over 35 countries, representing the largest collection of digital music rights outside the major labels.
The survey found that from 2011 to 2012, 92% of its labels and distributors had seen streaming and subscription revenues increase year-on-year, a third of those labels seeing those revenues increase by over 100%. For almost a quarter of respondents, streaming is now generating more income than download sales, particularly in Europe, where nearly a third of Merlin members said they now bring in more than 50% of digital income through streaming. In the US, this figure dropped to 16%.
Though some in the record industry fear that streaming will cannibalise traditional downloads, Merlin’s research showed this not to be the case for most of its members. Just under 64% of companies also saw a la carte download sales increase during the period surveyed, more than 20% saying download sales were up over 50%.
Merlin also reported that its members’ share of the streaming market is 12-20% higher than their share of the overall digital market in the US and UK, with royalties in excess of $65 million expected to come in from these services alone in 2013. Overall, 73% said that their total revenues had increased between 2011 and 2012. For 20% of these, overall revenue increasef in excess of 50%.
Announcing the findings, Caldas said: “Five years on from the establishment of Merlin, it is clear that the streaming business is coming of age. We are in an exciting phase of the business. The new generation of digital services has created a new dynamic of consumer freedom, limitless choice and myriad paths to discovery. Our numbers illustrate that this dynamic is bringing incremental value to the market, and the demand from music fans for the music being released by our independent members is higher than ever before”.
He continued: “But the ecosystem is fragile: power is more concentrated than ever, and we are seeing an attempted land grab by the largest companies for digital market shares as they try to recreate the old-market advantages they are clearly losing in the digital space. Any digital service that comes to market pre-shaped to satisfy the demands of the largest companies, and without understanding this new consumer-led dynamic, is bound to fail. And in this delicate phase of the business, that is bad news for us all”.
Elsewhere, the survey found that iTunes, Spotify and Amazon MP3 are the dominant services throughout the UK, US and Europe. However, while eMusic comes in fourth in the US and in global results, Deezer is fourth strongest in the UK and Europe – eMusic coming fifth in the UK and sixth in Europe, behind Beatport. Although arguably the biggest and most popular streaming service online, YouTube, ranks fifth in terms of revenues globally, and even lower for the UK and Europe.
Global service rankings for Merlin members:
3 Amazon MP3
8 Google Play
The new Merlin report was launched during the first keynote session at The Great Escape Convention 2013 which runs until Saturday.