When indie body Merlin criticises streaming services, it’s usually because they haven’t licensed its members works at launch (see: Myspace, Rdio, Rara and Songl in recent times). This week, though, German service Simfy is in Merlin’s crosshairs over an argument over equity.
Merlin has pulled its members’ tracks from Simfy six months before the companies’ current licensing deal was due to expire. “We have recently tried to engage the service’s new management in a discussion about the equity interest Merlin was granted in the company,” CEO Charles Caldas wrote to labels in an email obtained by Hypebot.
“These discussions culminated last week in the new CEO contacting us to make clear that he considers the Merlin relationship insignificant to Simfy’s business (although we have a market share on the service well in excess of 12%). We have no confidence that the new ownership of the business understands the value of Merlin’s repertoire or intends to honour the terms of the agreement on equity and last week’s fruitless discussions made it clear that the best option for Merlin was termination of the agreement.”
The matter is in the hands of lawyers now. It’s a setback for all concerned: for Simfy, because of the disappearance of tracks that account for 12% of its streams; for labels, who would presumably rather be on Simfy than off it; and for Merlin itself, in terms of its perceived clout to defend those members’ interests.
Streaming is increasingly important to Merlin: earlier this year, it said it was expecting to collect more than $65m of streaming revenues for its members in 2013. Caldas has also suggested that those labels regularly see streaming market shares between 12% and 20% higher than their overall digital market shares.
The company’s willingness to defend the rights of its members is unquestioned, including calling the bluff of services that it feels are disrespecting those labels. Yet the stats about indies’ collective market share, and their ability to spawn global hits, are well known. It’s a fair question to ask why these rows keep happening, then.