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Analysis Of Merlin's Revenue Distributions
Audio streaming growth outstrips video 3-to-1 as distributions to independent labels hit $353m
By Eric de Fontenay (Founder & Publisher)
(more articles from this author)
2017-06-14
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Merlin, the global digital rights agency for the independent label sector, unveiled an updated analysis of their revenue distributions.

Merlin Revenue Distributions Up 52% To $353m
Boosted by a significant uptake in audio streaming, year-on-year revenue distributions (April 2016-March 2017) to Merlin's independent record label members increased 52% to $353m. Within the space of four years, revenues paid out to Merlin members have increased more than eightfold. In addition to a new multi-year global license agreement with Spotify (announced in April 2017), Merlin now has partnerships in place with 20 new generation digital music services, including SoundCloud, YouTube Red, Pandora, Google Play, Deezer, Vevo and KKBOX.

A Great Leap Forward: Audio Streaming Comes Of Age
Nearly two-thirds (64%) of Merlin members report that audio streaming accounts for the majority of their digital revenues. This marks a significant leap from 2016, when less than half (46%) said this was the case.

But One Step Back: Video Streaming Underperforms
Merlin continues to see only negligible growth from video streaming. According to an analysis of hundreds of billions of streams comparing the 12 months to March 2017 with the year before, revenue growth from audio streaming is outpacing that of video streaming at a rate of more than 3-to-1.

Concurrently, and similar to findings in 2016, 42% of members report that services such as YouTube account for less than 5% of their digital revenues. This equates to a significant market disparity, with video streaming services commanding ten times more users than audio streaming services - but returning less than a tenth of the revenues.

Digital Dominates Overall Business Revenues For Two-Thirds Of Merlin Members
In 2015, 55% of Merlin members stated that digital income accounted for over half their overall business revenues. Two years on, this is now the case for more than two-thirds (67%) of members. 39% state that digital income accounts for more than 75% of their overall business revenues.

Consistent Business Growth For Three Years In Succession
Despite a seismic shift from downloads to streaming, this is the 3rd calendar year in succession that two-thirds (66%) of Merlin members have reported growth of their overall business (year-end 2015 to year-end 2016). 83% say they are optimistic about the future of their business. 85% state that Merlin membership is important to their business.

Merlin Members' Music Thrives On Paid-For Subscription Tiers
On audio streaming services, Merlin members' music is favoured predominantly by paying subscribers. Despite improved performance on free ad-funded tiers, plays were still 19% higher on paid streaming tiers . Significantly, this pattern is repeated globally and wherever Merlin members' repertoire is streamed.

Streaming Opens International Opportunties
Audio streaming's global accessibility continues to present new international opportunities for independent music. 42% of Merlin members report that over half of their digital revenues came from outside their home territory. By comparison only 17% reported the same for physical revenues.

Representing the most valuable set of rights outside of those controlled by the three major labels, Merlin's 700-strong membership commands in excess of 12% of the global digital recorded music market across more than 20,000 labels - including such globally-recognised label brands as Beggars Group, Domino, Epitaph/Anti, Kobalt Music Recordings, [PIAS], Secretly Group, Sub Pop and Warp Records.

Related News from Mi2N:
» Merlin Member Survey 2017


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