Merlin, the global digital rights agency for the independent label sector, released its Membership Report & Survey of 2019. It revealed a 63% year-on-year increase in member payments for the fiscal year 2019 amounting to $845 million.
Over $130 million in revenue have been generated from settlements and other non-royalty income. The sale of Spotify shares was distributed in line with its commitment to transparent and accurate reporting contributed to the proceeds.
In 2008, Merlin announced its first commercial partnership. Since then Merlin has paid in excess of $2 billion to its members. They represent thousands of independent labels and distributors and licensed more than 25 DSPs on a global basis.
Merlin, over the past year, has seen its biggest influx of new members. So much so that it added 141 companies to its membership. Today, it represents independent music businesses across 63 countries. On the basis of data collected from independent labels and distributors in 35 countries across 5 continents, Merlin’s 2019-member survey also represents the year it elicited the largest number of respondents.
“I am delighted to report another record-breaking increase in payments to our global membership. What’s particularly gratifying is the inclusion of more than $130m in monies that members would not have captured were it not for Merlin’s formation. These are significant revenues that underline the incremental value Merlin brings to our global membership.
“That we can deliver such payments is testament both to the collective strength of our members’ repertoire, and Merlin’s ability to deliver best-in-class licensing alongside fully equitable and transparent reporting and payments. It means Merlin’s members can report quickly and accurately to their artists and clients, that they can thrive as truly independent businesses, and invest even further in the creation and development of new music,”
commented Charles Caldas, CEO, Merlin.
What do the respondents say?
The overall business of the company is growing due to its increasing number of members. 81% of unprecedented respondents stated an increase in the overall business in 2018. According to 31%, the overall business has gone up by 50%. An average of 67% of respondents agreed on a significant increase in previous member surveys which increased total business revenues.
Merlin’s “optimism index” also hit an all-time high in 2019. 85% of the respondents today believe in the future of the business as compared to 78% in 2018.
Helen Alexander, CFO, Merlin, added,
“It’s an absolute priority for Merlin that our reporting is transparent and fully attributable, and especially so given the increases in non-royalty income. This is no small undertaking, but it ensures our members can understand what they’re being paid – and why. For instance, every cent that Merlin received from the sale of Spotify shares was paid out quickly, pro-rated on a track-by-track basis, and with 100% transparency.”
The force behind digital income
Audio streaming being the main force to drive digital income, it dominates their overall business. 54% of Merlin’s members report that digital income currently accounts for more than 75% of their overall business revenues. However, only 39% reported the same in 2018.
Despite the percentage of digital income from video streaming remaining static, it is making an effort to catch up to the income from audio streaming.
Contrarily, 79% of respondents believe that video accounts for less than 25% of their digital income. The percentage remains unchanged from member surveys dating back to 2014. Meanwhile, respondents who said video accounts for less than 10% of their digital income dropped from 63% (2018) to 55% in 2019. Those who said video accounts for less than 5% of their digital income dropped from 37% (2018) to 31% (2019).
The members at Merlin are looking at global expansion through China. 15% of respondents believe that China offers the greatest potential, despite fewer than 0.5% of the members having their primary business based in mainland China.
In 2018, the organisation agreed on landmark non-exclusive partnerships with Chinese DSPs NetEase, Alibaba, and Tencent. Merlin’s repertoire across Latin America and Brazil is growing. Brazil is the company’s fifth most valuable territory along with Mexico in the Top 10. Currently, 32% of non-U.S. members believe that U.S.A offers the greatest potential for increased digital consumption of their repertoire.
Merlin works to represent the wider independent label community and provide better service at a low cost. Last year, Merlin delivered more than a half-billion dollars to its members. Charles Caldas, CEO, Merlin has been recognised as one of the leading global music execs of 2019.
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