The financial results of the major labels get plenty of media coverage, but are independent labels enjoying similar growth in the streaming era? The latest figures from one of the largest independents, Beggars Group, offer some useful data. Filed in the UK, the figures are for the calendar year 2018.

Key stats: Beggars Group’s total revenues including its share of joint ventures (which include Matador Records, XL Recordings, Remote Control Records and others) were £74.2m (around $91.5m), up by 1.1% year-on-year. Minus the share of revenues from those joint ventures, Beggars Group’s turnover was £40.6m, up by 5.6%. The group’s net profit grew by an impressive 51.5% to £10.6m, for a period in which its cost of sales fell from £15.6m in 2017 to £8.7m in 2018.

“As streaming and subscriber growth continues apace, our music too has enjoyed growth in line with the market. Our entire catalogue has been the beneficiary of this phenomenon, not just recent releases,” explained Beggars Group in the strategic report part of its filing. It also highlights growth in streaming from developing markets; “enormous success” in the US; and a continued strong performance in Europe and Australasia.

The filing also explains how Beggars Group distributed its share of indie licensing agency Merlin’s windfall from selling its shares in Spotify after the streaming service went public. “We accounted 50% of those revenues to all our artists, past and present. After allowing for recoupment, 44% was paid out in cash,” explained Beggars. “Certain other companies apparently distributed these revenues based on the artist royalty rate, meaning they would have paid out a far lower percentage irrespective of recoupment.”

(Extra context: a few years ago, Beggars Group wrote off unrecouped balances for older catalogue-artists who hadn’t released a new record for a certain amount of time “so that when the streaming royalties came through, they actually got paid something, rather than it just going to offset the unrecouped balance” according to the company’s digital boss Simon Wheeler. “Hopefully it’s going to make some difference to a number of our artists.” With the Spotify windfall, it certainly should have.)

One final titbit from the Beggars financials is on the IT side. “We have built our own data source platfrom and every month process over 1bn digital transactions… from 200 Digital Service Providers covering 241 countries, with a metadata matching rate of 99.9%.” The ‘241 countries’ stat is a bit puzzling – there are 193 members of the UN – but the metadata-matching stat is the one to admire, given the industry’s continuing issues around that particular area.

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Music Ally's Head of Insight

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