Let Me Hear You Stream: Indies Rock Overseas Music Markets
Let Me Hear You Stream: Indies Rock Overseas Music
Markets
Streaming platforms are extending the reach of
independent record labels in ways physical and digital formats haven’t
By Anne Steele March 15, 2018 9:00 a.m. ET
Independent record labels are experiencing a surge in
international revenue as streaming services like Spotify Technology SA open up
foreign markets previously accessible only to local music companies and major
labels with global marketing and distribution capabilities.
The proliferation of streaming is changing the shape of
independent labels’ business. Some now draw almost half of their streams from
listeners outside their home country—and much of that growth is happening in
unexpected markets.
In Latin America—not long ago thought to be a lost cause
thanks to physical and digital piracy—independent record labels’ revenue grew
at three times the overall world-wide rate, according to Merlin, a trade group.
The organization negotiates digital-distribution deals on behalf of more than
20,000 independent labels based in 53 countries.
Brazil recently surpassed France, Canada and Australia as
a source of music revenue for Merlin members. Merlin Chief Executive Charles
Caldas predicts it will become the group’s fifth-biggest territory in 2018.
Mexico, Chile and Argentina are already in the top 20.
In documents filed with the Securities and Exchange
Commission earlier this month, Spotify said its service is growing faster in
Latin America than in North America or Europe, although the latter markets
still have many more Spotify users than Latin America.
While the record industry overall is seeing certain
markets emerge as meaningful sources of revenue, the international growth
driven by streaming is more pronounced for independent labels, which didn’t
have the infrastructure to distribute and market physical formats across the
globe. Before Merlin was formed, most independents were distributed by major
labels, which often would not distribute them abroad.
‘Indies operating
in the ‘90s and early 2000s would not have been getting anywhere near the
percentage of revenue from those markets that they get now.’
—Charles Caldas,
Merlin
The download market, with its free 30-second song
samples, was more successful than the physical market for indies, but the
streaming world has made exploration much easier, especially thanks to the
playlists that are among Spotify’s most popular features.
Independent labels’ market share on streaming platforms
is much better than it ever was with physical or download formats; Merlin’s
member labels account for 14% of listening time across services.
Merlin earned more than $40 million in audiostreaming revenue
in Latin America last year. That is 18 times what the organization earned in
2014, the year Spotify and Google Play were fully launched across the
continent.
The organization expects to generate more than $60
million in audio streaming in Latin America this year, with U.S.-based member
labels accounting for about half of that revenue. In all, Merlin projects $470
million in global revenue over the same period. The International Federation of
the Phonographic Industry reported that global recorded music revenue totaled
$15.7 billion in 2016.
“Indies operating in the ‘90s and early 2000s would not
have been getting anywhere near the percentage of revenue from those markets
that they get now,” says Mr. Caldas.
It is transforming independent labels’ business.
“When you drill down on any platform into your top
countries it’s very much more diverse than even six months ago,” says Jasper
Goggins, manager for independent label Mad Decent.
He said even when digital downloads began to overtake
physical formats, and iTunes was available outside of major western markets, it
didn’t always translate into sales.
“Up until fairly recently if there was a song we thought
would be popular in a foreign country there wasn’t a lot to show for it,” he
says. “There was the U.S. and Europe, and then everywhere else.”
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