Independents are the real winners of music’s streaming renaissance
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Independents are the real winners of music’s streaming renaissance

DIGITAL platforms and formats have helped independent labels compete better than ever before on the global stage, said Charles Caldas, the CEO of Merlin, a global rights agency for the independent label sector.

Though the major labels and distributors still control huge market shares in the music industry, the rise of digital platforms and new audio-visual technologies has helped independent labels and artists gain more exposure through non-traditional channels. Today, more than 12 percent of the global digital recorded music market is made up of these non-traditional players.

The digital revolution has both wreaked havoc on the music industry – you’ll remember that the industry has been contracting for more than a decade, and the institutions across the music space have placed the blame squarely at the feet of streaming services which they claim are not providing enough compensation.

However, as various reports have indicated, streaming services have actually revived the languishing industry, bringing news of revitalized growth. The industry recorded its second year of growth this year, accoding to the International Federation of the Phonographic Industry (IFPI) which reported a 5.9 percent margin of growth in 2016.

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Those numbers are largely due to the boom in streaming across the world, and in particular it’s been healthful for the independent markets.

According to Caldas, who was speaking at the All That Matters conference in Singapore, the independent sector has undergone a kind of renaissance thanks to the power of the streaming service. Platforms such as Spotify, Jukes, Apple Music and the like have brought visibility to independent artists and labels which have previously been drowned out of the masses’ attention.

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Spotify has helped drive the listenership of independents. Source: Reuters

“The reality is that in the streaming space independents are competing in a way that they’ve never really ever enjoyed before,” said Caldas in Singapore today. “Our market share of listenership on streaming services is far beyond what we saw in the physical or download market.”

The main reason for that listeners have access to all music all of the time, which has proven a boon for independent artists and labels who are usually edged out of traditional distribution platforms such as radio, television, press and retail. Merlin itself has seen its revenues more than triple between 2014 and 2017.

According to Caldas, independents have thrived today largely because of the breathing space that’s been provided by streaming services and the entrepreneurs who live in the world outside the big three music labels.

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“Independents are growing faster in that’s because our space is driven by real entrepreneurs who are facing the future, and really making use of all the opportunities streaming services can provide,” said Caldas. One might surmise that in many ways, the streaming platform – which democratizes music access and distribution – was made to favor the independent who is used to struggling to get his music out there.

Streaming services are able to tie in their social media presences to grow their exposure. “They’re able to control how they interact in the digital space and play around with connectivity with their listeners,” said Caldas.

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Digital streaming platforms have helped bring music from independent labels and artists to ears all over the world. Source: Shutterstock

Now that distribution services have become easily available, independents have become far more empowered to take their music not only to more listeners in their home countries, but to a global audience.

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A global audience

The digitization of the music industry has been pivotal to bringing independent music to ears all over the world. The independent markets have seen some great traction in non-traditional countries, where up until now only big hitters from the three major labels have managed to penetrate through. Caldas said that there’s a lot of potential to be gained from artists and labels looking at entering the Asian markets, seeing as how the growth of revenue in those markets is significantly higher than those seen in the global market.

Asian markets registered 60 percent more revenue growth in terms of recorded music profits as compared to the global market over the last year, according to Merlin data.

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More than ever before, independents are able to tap into a greater market of international audiences. Source: Shutterstock

Asian markets in general – though not everyone wears the same shoes, of course – have seen much lighter – have not seen as much activity as say, the US, having come a bit later to the streaming industry. But Caldas says that that niche means that there isn’t yet an established market with high barriers to entry, making it a prime opportunity for new, non-mainstream entrants to break in.

“The growth that we’re seeing is not just in the USA but in emerging markets,” Caldas explained. “Brazil streaming revenue will soon exceed those in France.” Caldas added that Indonesia and Malaysia will do particularly well as those markets continue to mature. 

“These rates of growth that we’re seeing across Asian markets indicates that this is not going to stop,” he said. “This acceleration of growth and adoption of these platforms presents incredible opportunities for not only these markets but regionally.”

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  • For the most part, the access to these markets has been driven by the large-scale adoption of digital streaming platforms by more and more labels and artists. Today, more than ever, small artists have the ability to drive their business beyond their home territories, helping them to expand outward to listeners that would otherwise not be accessible.

In a conversation with music streaming platforms, Siddhartha Roya from India’s Hungama.com said that the company saw a significant opportunity to reach out to diaspora South Asians who are interested in their content. The easily available content through their digital streaming service meant that Hungama.com is steadily growing a user base beyond their native country. According to Merlin, 85 percent of an Indian company’s content was accessed outside India than inside it, proving that there’s an international demand for such content.

  • “There’s a global market place for everyone,” said Caldas. “More companies are earning dollars outside their home territories in the digital space, versus the physical space.” 

Furthermore, the digital platform is extremely important for gleaning data about where new audiences can be reached. Caldas points out the fact that “getting the data about where your music should be played and where you should be putting your efforts and resources” is a central concern for businesses looking for reasons to be more outward facing.

  • “You need to build your strategy around how your music gets out on these platforms.”