A landmark day: Merlin announces a billion dollars paid to independent record labels
In a landmark day for independent music, Merlin, the global digital rights agency for the independent label sector, has announced its billionth dollar in distributions.
Encapsulating sentiment from leading music business figures, Darius Van Arman, co-owner of the Secretly Label Group (Bon Iver, Angel Olsen, ANOHNI, Damien Jurado, Mitski, Dinosaur Jr) commented:
“Thanks to Merlin, independent music companies can compete with the biggest recording companies. Now that Merlin has paid over a billion dollars to its members, we can proudly say that Merlin is an essential pillar of the music economy, supporting a fair, healthy and diverse marketplace for artists and companies of all sizes.”
Martin Mills, Chairman of Beggars Group, added:
“Incredible - what a great tribute to everyone involved.”
See full list of comments below.
Opening for business in May 2008, with a remit to add global efficiencies to the licensing of new generation streaming services, Merlin acts on behalf of more than 20,000 independent record labels and distributors from 53 countries, across five continents, ensuring they can participate in all benefits from the licensing of their content.
The agency has firmly established itself as a market leader, enabling new-generation services to license - via a single global deal - the largest basket of rights outside of the three major labels, and to access music from the world’s most important, unique and successful artists.
Since agreeing its first commercial partnership in September 2008 as launch partner to Spotify, Merlin has now licensed more than 20 digital music services - including Deezer, Google Play, iHeartRadio, SoundCloud, YouTube Red, Pandora, Vevoand KKBOX.
Over the past five years, annual revenues paid to Merlin members have increased eightfold, while administration fees have dropped almost 80%.
Frequently referred to as the “virtual fourth major”, the agency has gained a hard-won reputation for ensuring the unique value of its members’ repertoire is recognised commercially. Notably, in April 2017, Merlin announced a renewed multi-year global licence with Spotify.
The agency’s combined membership commands over 12% of the digital recorded music market, including such globally-recognised label brands as Beggars Group, Secretly Group, Domino, Sub Pop, Epitaph, Anti Records, Entertainment One, Redeye Worldwide, !K7, Kobalt Music Recordings, [PIAS], Merge, Warp, INgrooves, Hopeless Records, Armada Music, Mad Decent, Eleven Seven Music, Naxos and Curb Records.
Music from artists signed to these labels remains the most highly valued on audio streaming services, with usage rates of Merlin members’ repertoire consistently higher on paid-for subscriptions than free ad-funded tiers. This has a far-reaching impact for Merlin members, for instance:
• Reaping the benefits from the transition to a streaming market
In June 2017, 64% of Merlin members report that streaming services accounted for over half their digital revenues - up from 46% in 2016, and 34% in 2015.
• Strong international growth
Audio streaming has clearly opened new global markets for independent labels. 42% of Merlin members report that overseas usage accounts for a majority of their digital revenue, while Merlin’s revenues from Brazil have now overtaken those from France.
• Consistent and long-term revenue increases
In June 2017, Merlin announced 2015-2016 distributions to members of $353m - up 52% from 2014-2015.
Merlin’s diverse membership is represented via Merlin’s four offices (London, New York, Tokyo, and an HQ in Amsterdam) and by a team of only 17. Speaking on today’s announcement, Charles Caldas, CEO Merlin, said:
“It makes me immensely proud to reach this landmark. Like all the best independent labels, Merlin is run with passion, as a lean and efficient operation – albeit with an extensive and profound global responsibility. Our unique structure has empowered Merlin’s members to sit centre stage in the streaming market, while enabling digital music services to capitalise on the immense consumer demand for independent music.
“Even more inspiring is that this billion dollars in revenues comes only from the new-generation services that have launched since we did. In a market still in its early stages of evolution, the more significant growth is arguably yet to come.”
Other leading figures from the independent music community have also commented on Merlin’s achievements:
Michel Lambot, joint founder, PIAS:
“When we dreamt about acting collectively in setting up Merlin almost 10 years ago we thought we were being really optimistic by setting a budget with an estimated best-scenario turnover of $10M, some said we were crazy and … now we have delivered a billion dollars to the independent community…wow… I am so pleased and so impressed. Thanks Charles, Thank you Merlin. Let’s continue to dream together.”
Dave Hansen, GM, Epitaph
“Amazing times when Merlin announces that they have sent out its first billion dollars to their independent label and distributor members while making deals with the digital services that provide us with a competitive edge. We are extremely proud to be part of it all.”
Glenn Dicker, Co-owner, Redeye:
“A big congrats and thanks to Merlin for making a huge difference to our business by helping us compete on a more level playing field whilst allowing us to concentrate on providing our core services to our partners. Merlin helps indies be indies and to be more self-reliant in making the best decisions for their individual businesses.”
Tom Silverman, Founder, Tommy Boy:
"When we dreamed up Merlin, we hoped to better compete with the then four major labels and to be able to negotiate competitive deals for our members and participate in industry settlement actions. We never dreamed that we would eventually distribute a billion dollars to our sector. And this is only the beginning!”
Ashley Whitfield, Owner, Evolution Ltd Hong Kong
“One billion dollars - not to mention the Warner divestment, and other key achievements! Merlin has been the essential key for thousands of independent labels, big and small, to thrive in the digital era.”
Justin West, Founder, Secret City Records
“A testament to the significance of Merlin and the independent labels of all shapes and sizes that it represents.”
Yoel Kenan, CEO, AFRICORI
“Merlin’s track record continues to show how important it is as an organisation to artists and labels from around the world. It supports the independent community on so many levels, even in challenging regions such as Africa. Congratulations to Merlin’s first billion dollar paid and looking forward to many more to come.”
Scott Muir, Strategic Director, Dunedinmusic.com
“It’s great to see Merlin mark another milestone in delivering value to the indie sector. One billion dollars paid out since humble beginnings in 2007 is proof positive that independence is possible in the global digital market.”