Independent trade body WIN has published its first ‘WINTEL’ global independent music market report, announcing the key figures on-stage at Midem in Cannes.
The body says it’s the first global market-share analysis of the value of the indie sector, claiming that independent labels account for 37.6% of global recorded-music market share – contributing $5.6bn to the worldwide industry last year.
That market share is based on rights ownership: a careful decision on the part of WIN, which is aiming to show that the independent sector carries more weight than market-share figures based on distribution show. Many indie labels use major-owned distributors to release their music, which in some methodologies counts that market share as the majors’.
The report quantifies this, saying that 72% of independent labels use international distributors, while 52% use major labels or major-owned distributors.
WIN is using the report to claim that any figures that don’t use rights-ownership market share “distorts the true picture of market value” – which indies are particularly worried about if it negatively affects the deals they strike with services like Apple, Google and Spotify.
“This is an important report, giving us the first truly global overview of the economic and cultural value of independent music,” said WIN CEO Alison Wenham in a statement released alongside the report, which referred to its analysis as covering “real” market share for indies.
“With a 37.6% market share based on rights ownership, and a contribution of $5.6bn it is clear that the independent music community is playing an increasingly important part within the global music industry.”
Wenham explained more on-stage at Midem. “Independents have built sustainable businesses. We have businesses coming up to 50 years old, and we also have businesses born into the new digital era who are perfectly at ease working within and beside a frictionless market,” she said.
“We talk about global. The reach now for every record company, whether they’re a bedroom company in Lima or a dance outfit in Brazil is phenomenal. We’re seeing you can reach your market, wherever in the world you happen to exist,” continued Wenham, noting that 37% of independent label revenue is now international rather than domestic.
She came back to the market share question of measuring by distribution rather than rights ownership. “Market share figures are becoming less accurate, and that’s why we felt very driven to create our own,” said Wenham.
Mark Mulligan, who worked on the report with WIN, drew attention to the fact that 72% of independent labels use an international distributor, while 52% use a major label or major-owned distributor. “Even though it is essentially the independent record labels’ revenue, it appears also in the revenues of the major labels. It’s being double-counted,” said Mulligan.
He broke down the $5.6bn of global independent labels’ revenues: $2.3bn is physical revenue and $2.6bn digital revenue – of which $1.1bn is downloads and $1.1bn streams. He added that “independent labels over-index on streaming” – they have a 39.4% share of global streaming revenues compared to a 38.9% share of physical and 36.2% of downloads.
Mulligan said that there is a “massive, massive variation” in indies’ share: in Finland it’s just 16% of the market, through to South Korea where 88% of the market is independent. “Big, big companies that look and feel more like major companies than you would expect of an independent, but they’re still not one of the big three record companies,” he said.
Mulligan said that curated streaming playlists on services like Spotify and Apple Music will play a key role in determining how this market share evolves in the coming years – which may be an optimistic thing, since indies currently over-index on those playlists, or may be a concern for the independent sector, which fears majors trying to seize a bigger share of the pie.
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