A new study by independent rights body Merlin has found that digital income now makes up over 50% of the income of over half of its members. For a third of its members, digital accounts for 75% of overall revenue.
It has found that streaming is a key driver of growth for labels and is making up for the decline in download revenues that 36% of members reported experiencing. Three-quarters of respondents said that their digital revenues overall increased in 2014 – with 17% saying that digital income was up by over 50%. A significant number of members (8.6%) actually said their digital revenue had doubled from the previous year).
A third of respondents said that streaming is now their primary source of digital income. That said, 11.2% of respondents said they saw a decline in total digital revenues last year.
Some 17.9% of members said their streaming income has doubled and 44.5% said it has grown by 50% or more. Against this, however, 1.75% said they witnessed a decrease in streaming income.
Earlier this year, the IFPI published in Digital Music Report and found that, on a global level in 2014, digital income was exactly the same as physical income for labels (46% each with the remaining 8% coming from performance rights and sync).
Concurrent analysis of 9bn streams has found that indie repertoire is 35% higher on paid tiers on streaming services compared to ad-supported tiers. This puts the importance of the standoff last week with Apple Music (over planned non-payment of royalties during its three-month trial) into sharp relief and reinforces previous studies by Merlin that indie label content punches above its weight on streaming services.
Additional findings from the study include:
- A la carte download sales are the main source of digital income for 40.9% of Merlin members (dropping from 50.2%)
- A la carte download revenues grew for 44.7% of members (that said, 36.3% reported a decrease)
- For 7.6% of members, à la carte revenue grew by over 50%
- In March 2015, Merlin members’ repertoire was streamed 2.5bn times – a significant increase from 1.4bn in April 2014
- Video streaming income, however, is not that momentous as 82.4% of members reported that it brings in under 25% of their digital revenue
- 81.6% of members said they were “optimistic” about the future of their business but 6.1% said they were not
This is Merlin’s third member survey and is based on anonymous responses from independent label members from 26 countries.
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