WINTELTHE GLOBAL ECONOMIC & CULTURAL CONTRIBUTION
OF THE INDEPENDENT RECORD INDUSTRY

WINTELWORLDWIDEINDEPENDENTMARKETREPORT 2018

1

2

WINTEL

3

4

THE CURRENT WIN TRADE ASSOCIATIONMEMBERS ARE:

ABOUT WIN

A2IM

US

ADISQ

CANADAABMIBRAZIL

AIM

UK

AIR

AUSTRALIAAMAEIPORTUGALASIAR

ARGENTINA

AUDIOCOOP

ITALY

BIMA

BELGIUM

CIMA

CANADADUP

DENMARK

IMCJ

JAPAN

FONO

NORWAYIMI CHILECHILEIMPALAEUROPEIMNZ

NEW ZEALAND

INDIECOFINLAND

INDIESUISSESWITZERLAND

LIAK

SOUTH KOREAPIL

ISRAELPLATFORMACZECH REPUBLIC

PMI

ITALY

RUNDA

BALKANS

SOM

SWEDENIN ADDITION TO THE NETWORK OFASSOCIATIONS, WIN HAS A NETWORKOF LOCAL REPRESENTATIVES FROMTERRITORIES WHERE THERE IS CURRENTLYNO TRADE ASSOCIATION, INCLUDING:STOMPNETHERLANDSCARIBBEAN

NIGERIA

UFI

SPAIN

CHINA

POLANDUPFIFRANCE

INDIA

ROMANIAVTMOEAUSTRIA

IRELAND

SOUTH AFRICAVUT

GERMANYMALAYSIAVIETNAMHENRIETTE HEIMDAL PROJECT MANAGER, WIN
The Worldwide Independent
Network (WIN) is the coordinating
body for national independent
trade associations representing therecorded music industry aroundthe planet. Launched in 2006 in
response to global business, creative,
and market access issues facedby the independent sector, WINcollectively advocates, instigates,
and facilitates for its membership.

WINTEL

FOR MORE INFORMATION PLEASE VISIT:
MIDIARESEARCH.COM
MUSICALLY.COM
WINFORMUSIC.ORG

DESIGN BY OSTREET.CO.UK

5

WIN GRATEFULLY ACKNOWLEDGES
THE ASSISTANCE PROVIDED BY
EVERYONE WHO HAS CONTRIBUTEDTO WINTEL 2018
MIDIA RESEARCH

MUSIC ALLY

MIDiA Research is a boutique media
and technology analysis company.

Music Ally is a knowledge company.
We have more than 15 years worthof information, experience and dataon the global music business.

Mark Mulligan is the Managing
Director of MIDiA Research and a longterm media and technology analyst
and a leading thinker on the musicindustry’s digital transition. Mark has
15 years of media business analysis
and consulting experience, working
with leading global media, technology
and device companies. Mark heads up
MIDiA’s music research and oversees
all of MIDiA’s research output. Mark is
the author of the industry leading blog
Music Industry Blog. He is also authorof ‘Awakening: The Music Industry In
The Digital Age’ the definitive accountof the rise of the digital music market.
Karol Severin is MIDiA’s lead analyst
for research on the mobile content
economy. Karol’s research covers
all aspects of mobile content
including the mobile app economy,
freemium strategy, mobile consumer
segmentation, payment tactics andmobile discovery. Prior to joining MIDiA
Karol gained experience in a numberof marketing and research roles andas a technology start up founder.
Karol is based in their Berlin office.

Our daily news and weekly insightbriefings cover markets, technologies,
trends and viewpoints that areshaping the modern industry. We arealso the leading training provider
on digital growth and developmentin the music industry, and workwith artists, labels and managers
at all levels on digital marketingstrategy and campaign execution.
We also organise and run our own
events, including the Sandbox Summit
music-marketing conferences,and (in partnership with Music Biz)
the NY:LON Connect conferencein London and New York.

6

CONTENTS
4ABOUT WIN38

THE FUTURE IS BRIGHT FOR
INDIES ON SPOTIFY
JEN MASSET

7INTRODUCTIONALISON WENHAM

44

WHAT AN INDEPENDENTLABEL LOOKED LIKE IN 20178

KEY FINDINGS

46

BREAKING BORDERS: INDIE
INTERNATIONAL SUCCESSSTUART DREDGE

10

INDEPENDENTMARKET ANALYSISSTUART DREDGE

54

CONCLUSIONALISON WENHAM

16

MERLIN TURNS 10 AND
LOOKS AHEAD
STUART DREDGE

55

METHODOLOGY23

CASE STUDY:CIGARETTES AFTER SEX

56

MODEL DATA29

TALKING TO POWER: WHY THE
INDEPENDENT VOICE MATTERS
STUART DREDGE

WINTEL

7

INTRODUCTIONALISON WENHAM CEO, WIN
As 2018 draws to a close, we aredelighted to publish the third editionof WINTEL which maps the global
market share of the independent
recorded music sector using copyrightownership rather than distribution
as the measurement criteria.
2017 established the highest market
share for the sector since the earlynineties when scores of independentcompanies were acquired andremoved from the indie sector.
Increasing from around 20% in 1998
to 39.9% in 2017, during the most
turbulent period of the industry’s
history, is an astonishing achievement.
As always we make the case thatmeasuring music industry market
share by copyright ownership
continues to be the most legitimate
method as distribution isinterchangeable and involves only amodicum of risk, whereas investingin the creation of a copyright in thefirst place is the biggest risk thatany artist or music entrepreneur cantake. Getting it to market is thereafter
a question of choice for the artist.
Choice is now the most defining
feature of the global music industry—artists have every imaginable routeto their fans, from direct uploads tofull service contracts, but what isclear from the report is that once anartist has signed to an independentlabel, they choose to stay.

An average of 76% of artists choose
to renew their contracts with their
independent record company. Thisis a sure sign of a successful andenduring creative partnership as well
as a successful business alliance.
Also causing the global industry
to sit up and take note in 2018is the rapid rise of the so-called
emerging markets with China
enjoying a 36% rise in revenue
growth , Asia & Australasia seeing
a 5.4% spike in revenue andstreaming growth of 38%, while
Latin America powers ahead withoverall growth of 17% and an almost
50% rise in streaming revenues.
The speed at which these markets are
gaining influence both commerciallyand culturally has surprised everyone
and independent companies haveplayed and continue to play a majorrole is what is a hugely positive
development for the global industry.
In conclusion it has been anotherchallenging twelve months for ourindustry on a numberr of levels but
we have emerged with powerful new
legislation to protect our interests,
fantastic growth in some unexpected
territories and increasing support
from music fans who have continued
to enjoy and engage with theamazing music coming out of theworldwide independent community .

8

IN ORDER TO TAKE THE PULSE OF THE
GLOBAL INDEPENDENT RECORD LABEL
MARKET WIN COMMISSIONED MIDIA TO
CONDUCT A MAJOR GLOBAL SURVEY OF
INDEPENDENT LABELS ACROSS THE WORLD.
(MORE DETAILS ON THIS SURVEY CAN BE
FOUND IN THE METHODOLOGY SECTION
AT THE END OF THE REPORT).

INDEPENDENT LABEL GROWTH

KEY
FINDINGS
2017 MARKET SHAREINDEPENDENT LABELSSAW A 11.3% YEAR-ONYEAR GROWTH

GLOBAL MARKET SHARETHE REST OF THE
MARKET, ONLY SAW A
10.2% GROWTH.

INDEPENDENT LABELSMARKET SHARE 2017**AN INCREASE FROMDISTRIBUTION

22.4%

OF INDEPENDENT REVENUE
DISTRIBUTED BY MAJORS

38.4%

IN 2016

GROWTH IN STREAMING REVENUETHE INDEPENDENTS SAW A

46%

INCREASE IN STREAMING REVENUES.

WINTEL

9ARTIST LOYALTYARTIST LOYALTY77%

OF ARTISTSCHOOSE TO
RENEW THEIRCONTRACTS WITH
INDEPENDENTLABELS% OF ARTISTS RENEWINGWITH THEIR LABEL(BY COUNTRY)ARTIST DIRECT REVENUESGLOBAL INDEPENDENT MARKET SHAREARTISTS DIRECT
REPRESENTIN 2017

INDEPENDENTS ARE
POWERHOUSES IN
JAPAN AND
SOUTH KOREA$101M

UP FROM $94M IN 2016
OVERSEAS INDEPENDENT REVENUES

31%

OF INDEPENDENTREVENUES COMESFROM OVERSEAS

10

THIS YEAR’S WINTEL REPORT IS BASED ON
THE MOST COMPREHENSIVE SURVEY YET OF
THE ANNUAL MARKET SHARE OF THE
GLOBAL INDEPENDENT SECTOR.
THIS PIECE IS AUTHORED BY STUART
DREDGE, WITH DATA INSIGHT FROMMARK MULLIGAN OF MIDIA.

THE GLOBALINDEPENDENTSECTOR IN NUMBERS
WRITTEN BY STUART DREDGE
Based on respondents from North
America, Latin America, Europe andAsia who represent between themannual revenues of $1.9bn, the survey
includes companies whose revenues
range individually from less than
$1k a year to more than $300m.

The findings tell a clear and powerfulstory: independents are the fastestgrowing sector of the global recorded
music industry; they are benefitingfrom the industry’s transition fromsales to streaming, and the loyalty
they see from consumers, employees
and artists alike demonstrably shows
the respect and moral authority they
command, at a time when fairness andtransparency has never been more
important, nor more talked about.

Stuart Dredge

Mark Mulligan

WINTEL11

INDEPENDENT LABELS OUTPERFORMED THE MARKET IN 2017

INDEPENDENT LABELS SAW A
11.3% YEAR-ON-YEAR GROWTH
THE REST OF THE MARKET, ONLYSAW A 10.2% GROWTH.

WINTEL /MIDiA Research Independent Market Share Model (07/17)

THE FINDINGS TELL A CLEAR
AND POWERFUL STORY:INDEPENDENTS ARE THE
FASTEST-GROWING SECTOR
OF THE GLOBAL RECORDED
MUSIC INDUSTRY

Independent labels grew from $6.2bn
in 2016 to $6.9bn in 2017, which was
growth of 11.3% year-on-year. What’s
important about that figure is thatindies outperformed the overall music
market, which grew by 10.2% last year.
Independents also increased their
total market share to 39.9% in2017 with their growth outpacingthat of the major labels, whose
revenues grew by 9.7% that year.

12

MEASUREMENT OF THE MARKET BY OWNERSHIP NOT DISTRIBUTION

22.4%

OF INDEPENDENT REVENUE
DISTRIBUTED BY MAJORSWINTEL /MIDiA Research Independent Market Share Model (07/17)

Nearly $1.5bn of independent label
revenues came from labels andartists whose music was distributedby the major labels—through theirin-house distributor and labelservices divisions (Caroline for
Universal, The Orchard for SonyMusic and ADA for Warner Music).

Some industry metrics count theserevenues within the major labels’market shares, but WIN believes that
it is vital to measure the market notby who distributes music, but by whoowns it: when independent labels
shoulder the risk of signing artists
and investing in their music, it shouldcount towards their market share.

MAJOR-DISTRIBUTED INDEPENDENTMUSIC ACCOUNTS FOR 8.6% OF THE
TOTAL MARKET, AND 22.2% OF THE
INDEPENDENTS’ MARKET SHARE

Major-distributed independent musicaccounts for 8.6% of the total market,
and 22.2% of the independents’market share: it’s a significant sum
that should be assigned accurately.

WINTEL

13

STREAMING REVENUES ARE GROWING STRONGLY

THE INDEPENDENTS SAW A

46%

INCREASE IN STREAMING REVENUES.

WINTEL /MIDiA Research Independent Market Share Model (07/17)

By the end of 2017, 176 million
people were using music-streaming
subscription services globally,
according to the IFPI, which was up
by 64 million on 2016. This growth instreaming—and in paid streaming—isgreat news for independent labels.

Independent streaming revenues
grew by 46% in 2017 to $3.1bn, andnow account for just under 44% of thesector’s overall income, comparedto 33% in 2016. We’re approachinga tipping point—perhaps even thisyear—when streaming will represent
more than 50% of revenues.
This growth is no accident:
independent labels have been quick toadjust their businesses to streaming.
47% say that streaming makes their
cash flow easier, but that rises to 73%
for labels where streaming is alreadymore than 30% of their revenues.

These figures also hint at anotherencouraging trend for independentlabels: that their investment in artists’long-term development, and in thealbum format, is an advantage rather
than a risk in the streaming era. While
major labels expend considerable
marketing resources to breakindividual tracks, indies are investingfor the long term: and are developing
sustainable businesses as a result.

14

INDIES’ INTERNATIONAL HORIZONS ARE EXPANDING

31%

OF INDEPENDENTREVENUES COMESFROM OVERSEAS

WINTEL /MIDiA Research Independent Market Share Model (07/17)

THE AVERAGE INDEPENDENT LABELNOW GETS 31% OF ITS REVENUESFROM OVERSEAS, COMPARED TO
69% FROM THEIR HOME MARKET.

The big, global music-streaming
services are providing independent
music with easier access to listeners
around the world, and that’s showing
in their day-to-day businesses.
The average independent label
now gets 31% of its revenues
from overseas, compared to 69%
from their home market. Note,
this can vary according to the sizeof the label: some of the larger
independent companies now get
well over half of their revenues
from international markets.

WINTEL

15

INDEPENDENTS ARE POWERHOUSES IN JAPAN AND SOUTH KOREA

WINTEL /MIDiA Research Independent Market Share Model (07/17)

Globally, the independent
market share was 39.9% in 2017,
but unsurprisingly this varies
between individual countries,
from 15.6% in Spain to 37.8% in
Brazil. But two countries standout: Japan and South Korea.
In Japan, independent musiccompanies accounted for 63.7%of the market in 2017, while
in South Korea they took aneven larger share: 89.2%.

IN JAPAN, INDEPENDENT MUSICCOMPANIES ACCOUNTED FOR 63.7%
OF THE MARKET IN 2017, WHILE IN
SOUTH KOREA THEY TOOK AN EVENLARGER SHARE: 89.2%.

16

ARTISTS ARE LOYAL TO THEIR INDEPENDENT LABELS

77%

OF ARTISTS CHOOSE TO
RENEW THEIR CONTRACTSWITH INDEPENDENT LABELSARTISTS RENEWING BY COUNTRY
WINTEL /MIDiA Research Independent Market Share Model (07/17)

One of the most heartening statistics
from this year’s WINTEL survey
concerns the 76% of artists whochoose to renew their contracts
with independent labels when they
expire. That’s a reflection of the hard
work that those labels have put into help those artists develop theirtalent and reach their audience.

It’s also a reflection of stability
within the teams at these labels
who are working with artists. Basedon this year’s survey, 42% of staff
at independent companies havebeen there since the launch of thelabel – and bear in mind that the
average label is 14.9 years old.

The survey also offers a snapshot of
the modern independent label: theaverage is 13.6 full-time staff, 3.2
part-time staff and 97.6 artists intheir catalogue. This latter statistic
is relevant to the positive impact thatstreaming is having on independent
businesses: a strong catalogue
can build sustainable revenues.

WINTEL

17

ARTIST DIRECT REVENUES ARE INCREASING STEADILYARTISTS DIRECT REPRESENT$101M* IN 2017

*UP FROM $94M IN 2016
WINTEL /MIDiA Research Independent Market Share Model (07/17)

WIN CAN REVEAL, BASED ON THE
LATEST CALCULATIONS BY MIDIARESEARCH, THAT ARTIST DIRECTREVENUES GREW FROM $94M IN
2016 TO $101M IN 2017.

The definition of what we consider
to be ‘independent’ is evolving in
the modern music industry: besides
labels, it also now encompasses
artists who are self-releasing theirmusic through distributors. The
creative and commercial explosionof the grime genre, for example, hasbeen underpinned by this model.
WIN can reveal, based on the latest
calculations by MIDiA Research, that
Artist Direct revenues grew from$94m in 2016 to $101m in 2017.
As these artists build teams
around them to fulfil various
label-like functions, this sectionof our community looks set
to continue its growth.
In conclusion, another year of solidand impressive growth augurs wellfor the future of a sector that is
expanding globally in every way.

18

INDEPENDENT LICENSING AGENCYMERLIN CELEBRATED ITS 10TH BIRTHDAYEARLIER THIS YEAR, ANNOUNCING THATIT HAD DISTRIBUTED MORE THAN $1.5BN
TO ITS MEMBERS SINCE LAUNCHING IN
2008—WITH $500M OF THAT COMING IN
ITS LAST YEAR ALONE.

MERLINTURNS 10 AND
LOOKS AHEADWRITTEN BY STUART DREDGE
Merlin now represents the rights oftens of thousands of independentlabels from 53 countries in licensing
deals with global companies
including Spotify, YouTube,
Deezer, Pandora and Facebook,as well as regional streaming
services in countries including
Russia, China, India and Japan.
The not-for-profit agency wascreated by the independent sector
for the independent sector, andits market share can now be
comfortably compared to themajor labels, which positions
Merlin’s independent membership
front and centre on digital music
services alongside the majors.
Merlin also prides itself on
ensuring that all its members havethe opportunity to maximise the valueof the deals in which they participate,with equal access to Merlin benefits
regardless of a member’s size.
After the anniversary celebrations,
CEO Charles Caldas’ thoughts haveturned to the next decade for Merlin
and its members, with the global
nature of its business looming large.

“We’re now truly operating in a much
more global marketplace than we ever
have before. All of a sudden we’vegone from a market where as anindependent label you were runningat best a regional business,” he says.
“In fact, most people were running
independent labels in their own town
and their own country, and getting
their music into other markets
needed people on the ground. It’s
fundamentally different now.”In September, Caldas visited India for
the All About Music conference, andhis meetings with local independentlabels—“from Indian hip-hop toelectronic music and prog-rockinspired instrumental music!”—hasmade him realise how the streaming
era’s instant, global availability ofmusic is changing a market like India.
“It’s not one-way traffic. This
isn’t a ‘new colonialism’ where
western pop culture is colonising
the minds and ears of kids aroundthe world,” stresses Caldas, citing
the example of The Leaf Labelin the UK, which recently signed
an Indian artist from Mumbai.

WINTEL19“I don’t think that the history of
independent labels is littered with
examples of UK-based labels
using India as an A&R source!”says Caldas, noting that anotherindependent label, Domino, has
put out music from Indian-folk-jazzfusion band Yorkston/Thorne/Khan.
“It’s a by-product of technology: aby-product of the fact that we now
have these streaming services
that are clearly resonating with
consumers, and are becoming
significant commercial players within
their respective markets,” he says.
“If you look at India withstreaming services like Gaana
and Saavn, you might think it’s
just about Bollywood music.

Yet I’m meeting young label heads“Your audience can come from
who grew up in Birmingham and have unexpected places now, and I think
moved back to Delhi, because they
this phase from here on in is working
think the hip-hop scene there is going out how you connect the availability
to create some incredible music.”of that music with the data that’s
readily coming out of those platforms,“It’s not only the fact that thewhich shows you what’s happening
emergence of the instant availability
to your music” says Caldas.
of music globally has createda truly global audience. It’s
“It sparks questions about what theabout what’s happening there
shape of a label looks like; how youcommercially in terms of how
harness those opportunities; how you
independent labels are operating.”
use data without being overwhelmedby it. These all have their own
Another example: Caldas notes
challenges, but overall it’s incrediblythat an Australian label released
exciting. We’re in a much more fluid,an album by a local folk-rock band,
dynamic global marketplace.”
saw a track get picked up by one of
Spotify’s playlist editors in Mexico,
It’s a noisy marketplace too:and a few months on that countryaround 20,000 new tracks get
was the band’s third biggest market,
added to a streaming service
complete with offers to tour there.
like Spotify every day.

Charles Caldas CEO of Merlin

20“IT’S WHAT INDEPENDENT LABELS HAVEBEEN GREAT AT THROUGH THE HISTORY OF
RECORDED MUSIC: FINDING A GENRE, A
SCENE OR A PARTICULAR STRAIN OF MUSIC,AND DEFINING IT BY MAKING SURE IT CAMETO MARKET FOR PEOPLE TO DISCOVER.”

In the streaming era, there are“In this playlist-driven world, youno ‘chart walls’ or ‘front racking’—
see major labels chasing thoseterms that younger artists and label
high-volume RapCaviar or Today’s
founders may not even understand—
Top Hits tracks that really spike. But
and the 80% of revenue generated
independents haven’t really moved
He looks back to the heyday of labelsfrom their strategies of building long- by streaming services comes from alike Chess, Blue Note and Motown—ormuch deeper repertoire of music.
term careers for artists over several
more recently 4AD, Ninja Tune andreleases, and allowing those artists“The hits are always hits, and theErased Tapes—when fans knew what
to develop in an environment where
streaming volumes for Drake andsounds and scenes labels represented
they’re comfortable. I really do believe
other big artists are incredible. But(and in many cases defined).
we’re entering an era where that kind
there’s a lot of activity happening“You knew if you bought a Motown
of long-term commitment to yourfurther down the food chain,record, you weren’t going to be getting artists is going to pay dividends.”
which is driving an enormous
Perry Como or Dean Martin! It was aamount of value,” says Caldas.
One reason for that, Caldas believes,brand, or a cultural touchpoint, thatis that the shape of the music market
He also thinks that the naturedefined a whole genre. And that’s what
is different from the days whenof streaming—particularly thelabels like Ninja Tune and Erased
physical retailers would make 80%
algorithmically-personalised playlists
Tapes are doing now,” says Caldas.
of their money from a narrow range
such as Discover Weekly, Release“It’s what independent labels haveof releases that were in the chart,
Radar and Daily Mix on Spotify, or My
been great at through the history ofout that week or on special offer.
New Music Mix, Chill Mix and Friends
recorded music: finding a genre, a
Mix on Apple Music—is levelling thescene or a particular strain of music,
playing field for independent artists.
and defining it by making sure it cameto market for people to discover.”Cutting through that noise can seem
daunting for an independent label,
but Caldas thinks some traditional
principles will serve them well.

WINTEL“Your experience opening up that app
is now totally defined by whatever
you’ve been listening to in your history.
If you’re an electronic-music fan, you
won’t be seeing the new Katy Perry
record. It’s driving discovery deeper
down the food chain,” says Caldas.

21

That’s not so different from Spotify’smarket cap of more than $30bn,
but considerably smaller thanthe current market caps of Apple(more than $1tn), Google’s parent
company Alphabet ($818bn), Amazon($943bn) and Facebook $478bn).

“Consumers seem to be digging deeper That’s a big change from thedown into the crate, as it were, helped days when the biggest recordby these playlists. And that is playing
companies were always bigger (ininto the favour of the independents:
value) than the biggest retailers
it’s creating opportunities for them
distributing their music.
that weren’t really available before.
“Now our key retailers are tech
And that’s creating more value. It’s
companies that could in some
now easier to have a path to listeners
cases inhale the entire musicthat totally bypasses the major-label
industry into their businesssystem than it’s ever been before.”
without burping!” says Caldas.
As he looks ahead to the next
“On the positive side, it’s great
decade of Merlin, Caldas does seethat those companies recognisechallenges as well as opportunities.
the value of music within their
The fact that the music-streaming
offerings, and are making realmarket is dominated by large
investment to create attractive
technology companies, for example.
music propositions for consumers,
Universal Music Group has been
which in turn drive value to us.”valued at between $22bn and$40bn in recent times, depending
whose prediction you believe.

“But when the market starts to peak,
and they can’t just run on subscribergrowth any more—when you’re
getting closer to a more mature
marketplace—that dynamic could
become challenging when you’rea small industry in the hands of amuch bigger entity, and where thosemassive tech companies are going tostart competing with each other for
consumers on price and content.”
Caldas thinks that the independent
music community should be thinking
about this now, even if such a scenario
is still several years away. He points
to what happened with physicalmusic retailers in the past: when themarket matured, their relationships
with labels “became fairly attritionalaround margin, and quite adversarial”.
Could the same happen with the big
technology companies in the musicstreaming space? Caldas hopes thatsuch a prospect can be fended off bybuilding healthy relationships withthem now, to keep them as “goodpartners” in the longer term.

“IT’S NOW EASIER TO HAVE A PATH TO
LISTENERS THAT TOTALLY BYPASSES
THE MAJOR LABEL SYSTEM THAN IT’S
EVER BEEN BEFORE.”
CHARLES CALDASCEO OF MERLIN

22“They’re going to have the pressure
to start bundling different types ofrepertoire into single subscriptions,as we’re starting to see Amazon doing.
You’ll see music competing against
television and film and games in
multi-content subscriptions. So how
do you preserve value?” says Caldas.
“That’s the sort of question we need
to be thinking about, as well as what
does voice-activated music within
the car mean for consumption, andfor the access to market for the
independent sector? And how wellequipped are we to use all of the data
coming out of these services to ouradvantage, and not be overwhelmedor distracted or sidelined by it?”That’s one area where Merlin isalready at work, exploring thepotential to build technology for its
members to use, and ensure they
don’t fall behind what the majorlabels can do with data to gain anadvantage in the market. The agency
is also positioned as a long-term
partner for independent labels, since(unlike digital distributors, who are
currently hot acquisition targets for
major labels) it will never be sold.
He comes back to the inherent
innovation within the independentcommunity as a reason for optimism
about the future, however.

INDEPENDENT
BUT NOT ALONE.

At the SoundExchange Companies,
we focus on innovation so the independent
music community can focus on music.

“In the long term, I hope thatthe ambition and creativity andentrepreneurship really wins
out. And independent labels are
particularly good at that,” he says.
“In the last 12 months, Merlin
has had our biggest influx of new
members since the year we started
operating, which I think is a strong
illustration of that desire fromlabels to forge their own destiny.
If you’re a serious independentthat has ambition and enoughscale to be self-determining, it’seasier than it has ever been toplay in that global marketplace.”

WINTELWINTEL

23
23

CASE STUDY:CIGARETTESAFTER SEXWRITTEN BY STUART DREDGE

Greg Gonzalez Lead Singer

24

US BAND CIGARETTES AFTER SEX HAVEBEEN AN INDEPENDENT SUCCESS STORYOF RECENT YEARS, BUILDING A FERVENTFANBASE ACROSS THE WORLD.
It started in 2015 when theirtracks ‘Affection’ and ‘Nothing’s
Gonna Hurt You Baby’—the former
uploaded by a fan and the latteron their own channel—caught analgorithmic wave on YouTube whichdeveloped into a long-term surge.
The band and their manager Ed
Harris (of Blue Raincoat) decided
to go with this flow, which saw fansfeeling like they were discovering
Cigarettes After Sex’s music rather
than having it pushed at them.
“We decided to let this happen: notto force things, but to just support
what was already happening out
there, and then to bring out new
songs. We didn’t sponsor posts andin the early days we didn’t even doads on YouTube,” says Harris.

“None of us really wanted to messwith that by using any overly clevermarketing techniques, but rather stick
to what’s worked and amplify withtraditional media, a strong touring
strategy, building the fanbase, feedingthem new music. It’s kind of oldschool in that sense,” says White.
“It was really just always focusedon the music with a very minimal
aesthetic, albeit in a very deliberateand considered way, and in thatsense ‘discovery’ has continued
to be a really big driver in the
trajectory, with us really focusing
our marketing plans on that andfans then feeling a lot of ownershipover the band which is important.”“We didn’t want to be coming in withsome sort of pitch or advertising—
something that was going to get in
the way of that experience. It wasn’t
just happening from word of mouth: it
was happening from the algorithms.”
For the first year, it was the bandand Harris making these calls,
before signing with label Partisan
Records – which was fully behindthe strategy of organic growth.
Zena White, from Partisan Records,
agrees that there was a strategy ofworking with the algorithmic buzz.

Ed Harris Band Manager

WINTEL

25

Zena White Managing Director of Partisan Records

From YouTube, the band put theirmusic on Spotify and other streaming
services, and saw all boats rise asa result. They now have nearly 1.9
million monthly listeners on Spotify
and more than 423,000 subscribers
to their YouTube channel.

Touring also went against someof the traditional expectations of
how a band can scale. European
promoters were keenest to bookthe band in those early days, butinterest from Asia led to Cigarettes
After Sex touring there in 2017.

“It’s a very broad audience: it’s not justone category of person or subculture.
And it’s all over the world: it happened
globally very quickly: just people
connecting to this music and thisaesthetic. It’s nice that something canstill take off in that way,” says Harris.

Interest has built to the point
where they are now playing a
5,000-capacity gig in Seoul, on only
their second visit to South Korea.

The international success ofCigarettes After Sex hasn’t justbeen about streaming: it’s also been
about touring, from a tour of 150-200
capacity venues in Europe in early2016 that was driven by promoters
contacting Harris wanting to bookthe band, based on the online buzz.
“Six months later it was 500-ticket
shows, and by the end of 2016
we’d done 1,000 people at one or
two shows,” he says. “And it all
happened very organically, withpromoters reaching out to us.”White praises the band’s willingness
to work hard on the road, and notjust in traditional markets like
London and Paris, but in cities like
Prague and Lisbon. She also links
the band’s willingness to get out onstages across the world to someof their success selling music.

“It was the physical numbers thatreally surprised us on the rollout—wealways knew that France would be a
top market for us, everything about
India is another country where
it is what the French love so it’s noCigarettes After Sex picked up a
wonder that Francois Hardy has been
following. In December 2017, the banda huge champion—but there is aplayed the Bacardi NH7 Weekender
really high proportion of international
festival in Pune, after fielding plenty
sales from secondary and tertiaryof requests from fans there who’dmarkets such as Poland and Thailand
discovered their music on YouTube.
where we’ve sold over 10k and 1kunits respectively,” she says.
“The festival organisers couldn’t
believe how many fans came out“There are all these individual
for the band, but if you look at ourstories of countries,” adds Harris.
YouTube stats, in user-generated“I really do think Cigarettes is just ancontent India is number one. Andamazing test-case for what happens
on Facebook, the biggest pie-wedge
when a band breaks on the internet
after the United States is India:
worldwide. Although not everyoneof the 529,000 fans, more thantrusts it: one label we talked to said
50,000 are from India. There’s atheir digital analytics team thoughthuge fanbase there,” says Harris.
our numbers were fake, because
so many were from India. I said ifthat were the case, we wouldn’t beselling shows out all over the world!”

26

IT’S IMPORTANT TO STRESS THATTHE SUCCESS OF CIGARETTES AFTERSEX IS NOT ABOUT ‘VIRALITY’— IT’SABOUT THE MUSIC ITSELF.
It’s important to stress that thesuccess of Cigarettes After Sex
is not about ‘virality’—it’s about
the music itself. “It’s the type ofbeautiful music that cultivates bothan obsessive fan base and a hugeamount of passive listeners, so it’s
the perfect storm really,” says White.
“We had theories about the nameinitially being clickbait, but honestly
the engagement in the actual music
is too high for that to be the case.
There are a lot of repeat listens
and we’ve been running analysis
on search terms to find that hardly
anyone searching ‘cigarettes’ or‘sex’ stays on a play for longer thana few seconds. 43% of 1.9million
monthly Spotify listeners arefrom user library saves and thehighest YouTube driver is search.”“Some of this is untried territory:
there isn’t a model for this! In a
lot of ways, there isn’t a model foranybody any more: once there’s
an initial spark and you’re up andrunning, it’s up to you to build it,”he says. “And yes, you can have anamazing, international success in theindie sphere, and not need to moveto a major. Of course, you can decide
to make that move if you think it’sright for the artist, but a band like
Cigarettes show it’s not a necessity.”This even extends to sometraditional areas like radio.
Cigarettes After Sex might not seem
like a stereotypical ‘radio-friendly’
band, but Harris says he has beensurprised at how stations aroundthe world have backed the band.

Playlists on streaming services havealso played a role, with Cigarettes
After Sex’s music suiting some of
the most popular mood-focused
playlists, as well as making its way
onto the big new-music playlists onservices like Spotify and Apple Music.
White, however, says that thisis not a ‘playlist-driven’ successstory. “I can tell you that of their 1.9
million Spotify monthly listeners,
43% of plays are coming from own
playlists and libraries, 20% fromthe band’s profile and only 14%
from Spotify’s editorial,” she says.

“I’ve seen other examples wherea band has a lot of plays but it’s
mostly Spotify editorial. Whichmeans it’s mostly passive listening
from the platform’s own playlists“I’ve been surprised at how well we’ve
and algorithms—which means it’s
Harris sees the band’s growth as proof done at radio, from the BBC stations in a struggle to build an audience.”that remaining independent is a viable the UK to KROQ in the US. But having
Much of the band’s success hasroad to a global fanbase, contrary to
the groundswell of the algorithms
been organic, but that doesn’tsome traditional assumptions that this and fan support was definitely amean there hasn’t been a lot ofwould require the kind of marketing
powerful way. Satellite radio didn’t
thought behind the process fromclout only a major label could provide. pick up on the song until the record
both label and management.
had been out a year, but once they
picked it up, it became a bona fide
hit. And a lot of the US commercial
stations look at that now, so we had
people reaching out to us aboutpushing ‘Apocalypse’ to commercial
radio. That wasn’t even in my mind
to try to go after for this band!”WINTEL27

ACROSS LAST YEAR (OCT 2017—OCT 2018) INDIA HAS BEEN
SECOND SOURCE OF VIEWS FOR OFFICIAL MUSIC VIDEOS IN THE CHANNELPARTISAN RECORDS’ DATASHOWS HOW CIGARETTES AFTER
SEX HAVE BEEN REACHING FANSON YOUTUBE IN INDIA, POLAND,MEXICO AND TURKEY AMONG THE
USUAL MAJOR MUSIC MARKETS.

Data supplied in October 2018.

“We’ve spent more time analysing
and hypothesising on this campaign
than we have spent on some ofour most active campaign setups!
That’s really the key... you end up
having to sit on your hands and think
intelligently about what is working
rather than rolling out the same
spending budgets which is actually
really fun and makes for somefantastic conversations,” says White.
“We have a great relationship with
Ed and Blue Raincoat which reallyfeels like we’re all invested, andthey are cool to try new stuff, but
none of us want to spend on things
that don’t have any impact.”

Harris stresses that for all the viral“That doesn’t mean that we don’t still
fame that came Cigarettes After Sex’s need or want those traditional media
way, it’s the quality of the band’s
formats to come on board—of coursemusic (and their performance of it live) we’re focused on that too—but they’rethat matters in the long run. “It always not the gatekeepers anymore.”comes back to live. It’s amazing what
YouTube and playlists and the internet
has done for the band, but once
that’s all up and running, live is thebest way to connect with your fans.”
White says that the relationshipwith fans has also been key. “Acrossour roster, not just with Cigs but
also with IDLES, we’re learningthat it’s just as important to nurtureand embrace communities of fans
than it is to go after the traditional
methods of getting a ‘hit’. Social
media has replaced traditional
editorial in that way,” she says.

.com
y
l
l
a
c
usi

28

.m
www

is delighted to be able to oﬀer our subscription information service
to all independent label employees worldwide free of charge courtesy ofsponsorship from FUGA and Spotify and support from WIN

In association
with#MarketMusicBetterTo keep up with the latest developments in the music business and learn
more about digital marketing just sign up below:

https://MusicAlly.lnk.to/IndieLabelSignupMusic Ally is also oﬀering WIN member labels a special introductory rate of£299/$399/€349 for one of our artist digital health checks where we takea deep dive into:• SEO• Website Analysis• Audit of Social Proﬁles• CRM and email marketing• Data Collection• Data Ownership• YouTube• Spotify and streaming services

To take advantage of this oﬀer please contact anthony@musically.com

WINTELSEPTEMBER 2018 WILL GO DOWN INHISTORY AS AN EXTREMELY POSITIVEMONTH FOR THE MUSIC INDUSTRY,THANKS TO THE PROGRESS MADE ON
NEW LEGISLATION ON BOTH SIDES OF
THE ATLANTIC OCEAN.

29

TALKING TO POWER:
WHY THE INDEPENDENTVOICE MATTERS
WRITTEN BY STUART DREDGE
In the US, the Music Modernization
Act (MMA) was passed unanimously
by the Senate, in a process underwhich a single objection from asenator could have seen the billdelayed—and possibly even falling by
the legislative wayside altogether.

The music industry had campaigned
in support of Article 13, seeing it as
a way to fix the problem of the ‘value
gap’ between the amount of music
being consumed on platforms likeYouTube, and the royalties which they
pay out to music rightsholders.

The MMA is the biggest revamp of
US copyright laws for decades, andincludes changes that will simplify
the licensing process for musicstreaming services; ensure artists
and songwriters receive royalties
for streams of songs recorded
before 1972; and introduce a ‘willingbuyer / willing seller’ structure
for satellite-radio licensing.

Two pieces of legislation, and two
success stories for the music industry,
although both the MMA and theEuropean Copyright Directive havemore steps to go before they becomelaw. But September’s progress
also illustrated something else:the importance of the independentcommunity’s voice in the lobbyingthat led up to the crucial votes.

In Europe, meanwhile, the European
Parliament approved its take on a
new copyright directive, including
politicians voting to approve the muchdiscussed Article 13 of the proposed
legislation, which would make“online platforms and aggregators
liable for copyright infringements”.

From A2IM in the US to IMPALA andindependent-label bodies acrossEurope, the independent voice is being
heard loud and clear in Washington
DC, Brussels, Strasbourg andanywhere else where politicians andpolicymakers are at work. Our sector’s
credibility with these decision-makers
is at its highest level ever, and it isdriving real change that benefits ourglobal community of labels and artists.

30“THEY ALL HAD AN INFLUX OFDOLLARS THAT THEY DIDN’T
HAVE BEFORE. THEY WERE ABLE
TO LEVERAGE THAT INTO THEIR
BUSINESS AND INTO ARTISTDISCOVERY AND DEVELOPMENT.”STUART JOHNSTONPRESIDENT OF CIMA

CANADIAN BEGINNINGS
Tracing this political clout back takes
you to the early 1970s in Canada,
where an informal association of
independent music companies
came together for what would
later be formalised as trade body
CIRPA—which has since evolved
into the Canadian Independent
Music Association (CIMA).

“Parallel to that, we were successful
in getting the government to mandatethat radio channelled a proportionof its revenues back into the musicindustry. That got some great
airplay and visibility of our artists
on Canadian radio, coast-to-coast,and it also provided the royalties
for that airplay to our artists, so it
created a stronger revenue stream
for those artists on the radio,” says
Stuart Johnston, president of CIMA.

In the 1980s and 1990s, it successfully
lobbied on the issue of quotas for“Just as importantly, because thethe amount of Canadian music thatradio stations were mandated to also
was played on the radio, with thosechannel a proportion of their revenues
quotas starting at 20%, then risingback into the industry, it actually
to 25% and ultimately 35%— andstrengthened the infrastructure that
50% on public broadcaster CBC.
we have in Canada, and it allowed
our industry to have the resourcesthat they were then able to leverage
to invest in more and more artists.”

Stuart Johnson President of CIMAWINTEL“That raised the bar for our industry
and it created a very strong foundationand infrastructure of companies
like record labels, managers,
publishers and studios [in Canada].

31

COOPERATION AND LEGISLATION

Fast forward to 2018, and you’ll
find a similar sense among thebodies representing independents
that their advocacy can benefit the
They all had an influx of dollars thatentire industry. That’s why boththey didn’t have before. They were able
A2IM and IMPALA worked closely
to leverage that into their business andwith bodies representing major
into artist discovery and development.”labels, publishers, songwriters andothers in the run-up to September’s
CIMA also secured some importantcrucial MMA and Article 13 votes.
concessions the last time Canada’s
Copyright Act was reviewed, six years“The biggest thing was being ableago, and continues to be a prominent,
to pull together with the rest of
credible voice in music-related
the industry. There are things wepublic debates in its homeland.
don’t always agree on, but you
can’t get anything done in America
unless you act as a single musicindustry unit. So we’ve been pretty
successful in doing that over the
past couple of years,” says A2IM
CEO Richard James Burgess.

“The voice of the independents isdifferent to the voice of the rest of
the community, and it adds hugevalue. But clearly, working together
is very important,” agrees Helen
Smith, executive chair of IMPALA.
“In Europe we have various coalitions
on the value gap, competition, therelationship with platforms… We havea fluid approach: the composition of
our coalition will change according
to the issue that we’re working on.”Smith adds that particularly when
an issue sees the music and techindustries on opposite sides ofthe debate, as it did with Article
13, the role of independents
is even more important.

“THE VOICE OF THE INDEPENDENTS
IS DIFFERENT TO THE VOICE OF
THE REST OF THE COMMUNITY,
AND IT ADDS HUGE VALUE.”
HELEN SMITHEXECUTIVE CHAIR OF IMPALA

32

Helen Smith Executive Chair of IMPALA“It can sometimes be convenient for
opponents to try to portray a debate
as polarised around ‘big tech versus
big music’. That alienates all theother actors who are concerned,
and detracts from the validityof their points,” says Smith.
“For us, it was important to ensure
decision-makers understood that
Article 13 is important for everyone
involved in the creative chain: whether
you’re big or you’re small, not yet
known or already established.”
Both the MMA and Article 13
are examples of legislation
affecting the entire music industry
which could, nevertheless, havea particularly big impact on
independent labels and artists.
“Without this legislation, the chancesof individual musicians or labels being
able to negotiate and have a say in
how their music is used online areminimal, compared to the chances
you would have as a big operator,”says Smith, of the European plans.

“This was our chance to communicate
to those who were voting that thiswas their opportunity to level theplaying field for everyone. Platforms
would not just be paying those
who are big enough and organised
enough to negotiate agreements,
but also those who are smaller.”

BUILDING CREDIBILITY
How did we get to this point? In
Canada, the US and Europe alike,the first steps were educational:
explaining to policymakers what
the independent community is; how
and why it differs from the major
music companies; and why its voicedeserves to be heard separately,
as well as alongside them.
In Canada, where the independent
market share has grown from 20%
to around 25% over the last eight
years, Johnston sees progress.

“It took a lot of education, butthey finally know the distinction
between indies and majors.
At the same time, it is still a constanteducation process in government—bethat at the provincial level or thefederal level—to re-educate them
about who we are and what wedo,” he admits. “Bit by bit, we arechipping away. They [the government]
are certainly more educated today
than they were five years ago.”
Smith underlines the key role thatnational associations play in getting
messages across in Europe, building
relationships and influencing local
decision makers. “Through thisnetwork our campaigns become
more than the sum of their parts.”

WINTEL

Burgess points out that thiskind of education process isn’t
just for governments: it’s just as
necessary for new companies
entering the digital music world,from tech giants like Amazon andFacebook to smaller startups.
“Often when a digital service starts up,
they have almost nobody there who
knows much about music. Some ofthem still don’t! They’re tech people,
y’know,” says Burgess. “So they lookat the landscape, and [major-label]people say ‘we represent 85% of allrecorded music’. They distribute 85%of all music, in America. But they don’t
own 85%—they own about 62%, andwe own about 37.32% according to thelast numbers that Billboard published.”

33“OFTEN WHEN A DIGITALSERVICE STARTS UP, THEYHAVE ALMOST NOBODY
THERE WHO KNOWS
MUCH ABOUT MUSIC.”
RICHARD JAMES BURGESS PHDCEO OF A2IM

“If independents choose to deliver
their music through the major labels,
it doesn’t give the majors ownershipover that. Saying the majors own 85%of the music market is like saying
FedEx, the US Postal Service and
UPS own 100% of online retailing!
They deliver 100% of online-retailgoods. But they don’t own it.”
Burgess’ point is that it’s the roleof local bodies like A2IM as well as
WIN on the global level to correct any
misapprehensions among new digital
services, as well as policymakers.
“We have been really active in
expressing the numbers, so thatthe digital services are aware they
don’t just have to deal with the threemajors and deliver us crumbs: giving
them 85% of the money while leaving
37% of the market to live on theother 15% of the money,” he says.

Richard James Burgess PhD CEO of A2IM34

ACCESS TO FINANCE
Building the political credibilityof the independent community
has been about more than its
market-share within the musicindustry. It’s about explaining its
importance to the wider economy.
“The independents are small andmedium-sized companies. And
there’s certainly a sense in Congress
here that small and medium-sizedbusinesses, as they say, are theengine of the economy,” says Burgess.
“Job creation comes from small
and medium-sized businesses,
more than large businesses.
They really do add up.”
It’s the same in Europe, with Smith
saying that an important aspectof IMPALA’s work in recent years
has been working on issues likeaccess to finance, which led to a
new EU initiative called the ‘Cultural
and Creative Sector Guarantee
Facility’—which encourages banks
to lend to small and medium-sizedcompanies in the cultural andcreative industries, music included.

“There’s a huge multiplier effectwhen you have a guarantee behindyou. Banks are more comfortable
and they will lend more. You can
use finance to grow, and that’s
what’s important to the independent[music] sector,” says Smith.
“We need to have more mediumsized companies to strengthen the
sector for the longer term. We needto grow the missing middle! And
that’s something the EU has been
looking at for a long time acrossmultiple sectors: we don’t haveenough medium-sized companies.”
In Canada, too, access to financehas been a rallying point for the
independent community. Johnston
says that under the last government,
there was a threat that the CanadaMusic Fund—a $26m annual fundthat goes into the music industry—would be scrapped. But CIMA’s
campaign to avoid that paid off.
“What we got was a Conservative
government to make that fundpermanent. That was a huge
success,” he says, adding that CIMA
also convinced the new government
to commit to a new, annual export
fund for the creative industries,
worth $25m a year over five years.

“WHAT WE GOT WAS A
CONSERVATIVE GOVERNMENT TO
MAKE THAT FUND PERMANENT.
THAT WAS A HUGE SUCCESS”
RICHARD JAMES BURGESS PHD
CEOExports are a key strategic goal
for CIMA. A decade ago, it ran
three export missions a year for
its members to The Great Escapein the UK, SXSW in the US and
MIDEM in France. Now it runs morethan 20 missions a year under thebrand of Music Export Canada.
Access to finance is a key advocacy
point in the US too. “I see it when alabel gets started, has some success,and then gets snapped up by a majorlabel. We want to extend the ability
to our labels and even independent
artists who are self-releasing
to be able to stay independent if
they choose,” says Burgess.
“They might still sell to a majorlabel, if they’re doing it for the rightreasons and getting a fair deal outof it. But I hate to see people sellinga label they’ve worked on for 30 or
40 years, just because there aren’t
good alternative options available.”WINTEL

35“THOSE WHO WANT TOCONSOLIDATE HAVE TO JUSTIFY
WHY IT IS ACCEPTABLE. IT’S NOTFOR THOSE WHO OBJECT TO SETOUT WHY IT SHOULD BE STOPPED”
HELEN SMITHEXECUTIVE CHAIR OF IMPALATACKLING CONSOLIDATIONIMPALA works across a range ofissues, but it’s the organisation’srole in speaking out against
consolidation of the major companies
in our industry that has clearlyhighlighted its impact, down theyears: from its opposition to Time
Warner and EMI’s planned merger—
which was abandoned in 2001.
“This was the first time that the people
who had to make decisions could
actually hear from the independents
about what they thought the
impact would be. That was totallytransformative,” says Smith.
“Never before had anyone been to
the Commission to say hold on,
have you thought about what thismight do for competition? Have you
thought about the impact this might
have on the charts, or on whether
or not you can get on the radio?

These are points that IMPALA wasable to make that had never been
heard before, and that completelychanged how the EU looked atconsolidation in our market.”2004 saw IMPALA file a class-action
in relation to Sony and BMG’s plans
to merge, after the Commission
had raised serious concerns, thencleared the merger. The lawsuit
was an important factor in the 2006
decision by a European court rulingagainst that clearance, although on
appeal, that decision was reversed
again in 2007. Ultimately Sonyended up buying out BMG and thelitigation was set aside before a
final decision could be reached.
Even so, IMPALA’s case had longerterm consequences. “The court foundno presumption in favour of mergers.
Those who want to consolidate haveto justify why it is acceptable. It’s not
for those who object to set out why
it should be stopped,” says Smith.

“That seems obvious now! But in
actual fact, that was a big decision in
the court: it was the first time they’dever said that. One EU law firm said
that merger control procedure owed
a debt of gratitude to IMPALA.”FIGHTING FOR FAIRNESSOne topic that comes up regularly in
the interviews around independents’political clout is the idea of fairness,
and a moral authority that carries
weight with policymakers.
“There is a moral authority: we areseen as ethical,” says Burgess, citing
the Fair Digital Deals Declaration,
which was launched by WIN in July
2014 as a commitment by independentlabels to treat their artists fairly inagreements based on the exploitationof their work on digital services—for
example, when advances are paid
for a catalogue, or when there’s awindfall from equity in a company (forexample Spotify) that goes public.

36

COLLECTIVE ACTION“Sure, I can survive as an independentlabel, and even become very wealthy
Given the success stories fromas a label owner if I do well. At theindependent lobbying over the lastsame time, there are certain big
several decades, the benefits for thisissues that I can’t address on my own.
sector of a unified voice may seem
You can negotiate the best deal in theobvious. However, there was someworld, but if there’s legislation—or
convincing to be done in the earlya lack of legislation—in place thatdays of all these organisations.
causes you to make 20% less acrossHere, too, there is collaboration withthe board, if you negotiated 5% better
Burgess refers to fierce independence
other companies within the industry.
than your competitor, you’re still
as a wider American quality, including
Three years ago, when new rates
15% worse off than you should be!”for small and medium businesses
were being set for ‘non-interactive’– music included. “It’s built in to
Helen Smith agrees, and says that amusic-streaming services in the US,
the constitution of the country!
similar evolution in attitudes happened
like Pandora, A2IM pushed back at
And so I think that when A2IM wasamong European independent
a suggestion that in terms of royalty
formed, there was quite somemusic companies, at different paces
payments, independent tracks might
according to the country, with some
be worth less than major-label tracks. resistance to doing it,” he says.
organisations in existence for 40 years“The idea of collective action versus“That was very upsetting to ourand others starting more recently.
the American capitalist sensibility of
sector! But we started having‘we can do this and build ourselves“We can see now that the independents
regular meetings with the RIAA andup and have all the clout we need’.
across Europe believe that there is a
the major labels, and were able to
But it has become obvious to evenvalue in collective action, on a number
establish between us that we would
the biggest independent labels that,of different levels: commercial,
not view things that way. The majors
in an era when the music industry
political, financial… we can see that
said, to their credit, a copyright’s adoes not control its own distribution,
the independent sector understands
copyright: an independent label’s
there are issues that are bigger thanand feels there is a direct tangible
copyright is worth as much as aeven the biggest independents.”
benefit in that,” says Smith.
major label’s copyright,” he says.
“The perfect example of that isthat Merlin had a plan in place to
pay out the Spotify equity way aheadof the listing, and they paid out theequity within a couple of days of thelisting. And then Sony Music
followed suit,” says Burgess.
“Merlin set an excellent precedent.”“That’s the benefit of having a tradeassociation like A2IM, and it showsthe enormous importance of having
collegial relations within the business.
We don’t always see eye to eye withthe majors, but we need to be able
to sit down and work together… Lookat the MMA. The music industry’s
had a drought for decades getting
nothing through. Suddenly, when
we all stand together, we do.”“They understand that collective
action doesn’t mean that you arelosing your identity. Obviously, all
the independents are competing
fiercely with each other, but at
the same time they can benefit
from collective intelligence.

“NOW, I THINK PEOPLE ARE PRETTY
CLEAR, THAT THE INDEPENDENT SECTOR
IS A FORCE TO BE RECKONED WITH!”
RICHARD JAMES BURGESSCEOWINTEL37

Photography credit: Christian Wiediger

FACING THE FUTURE
With this unity secured, there are
more battles to be fought by allthese organisations. IMPALA isbusy on Sony’s attempt to gain solecontrol over EMI Music Publishingand is also working on a new
EU regulation that is intended todeliver fairness for businesses
dealing with online services.
In the US, A2IM is training its sights
on the long-standing complaint overterrestrial radio’s lack of royalties
paid out for music recordings playedon the airwaves, while in Canada,
CIMA is ensuring the government
delivers on its promise of a newreview of the Copyright Act, andmulling whether its radio-quota
lobbying successes of the past could
be revived for the streaming era.

“Clearly the most important part ofstreaming for artists is the playlists
on those platforms. We are wrestlingwith that,” says Johnston. “While
streaming services are global, if you
are operating in any territory, I thinkits strength should echo that of radio.
Reflect the local scene—because thatis where people live and breathe.”Underpinning all of these initiatives
and campaigns is a strong awarenessthat the independent community isstrong, credible and respected in
the corridors of power. A message itdoes no harm to continue reminding
those corridors’ inhabitants of.
“It’s important to be very open about
our strengths. We adapt and we keep
moving—and that’s one of the reasons
why we are successful.” says Smith.

“We are also very high risk-takers.
In Europe, we account for 80% of
all new releases, and that gives youa certain clout when you negotiate,
and when you speak on behalf of thesector—because the sector is very,
very creative. We are faster, better,smarter and we are leaders of themusic sector today. And that’s a very
powerful, and a very compelling story.”
Burgess agrees: “Now, I think people
are pretty clear, that the independent
sector is a force to be reckoned with!”

38

WITH 180 MILLION MONTHLY ACTIVE
USERS, INCLUDING 83 MILLION PAYINGSUBSCRIBERS, SPOTIFY’S REACH IS
COLOSSAL; BUT ITS COMMITMENT TO
INDEPENDENT LABELS AND ARTISTS HASREMAINED CORE TO ITS BELIEFS.

THE FUTURE
IS BRIGHT FOR
INDIES ON SPOTIFYWRITTEN BY JEN MASSET SPOTIFY
I joined Spotify in 2017 because I sharethese same beliefs. I’ve spent over 25
years working with the independent
music community, from record
stores to labels to the A2IM tradeorganization. So naturally, I’ve been
impressed with how Spotify has fully
and fairly embraced the indie world.
All artists and all labels are incredibly
important– Spotify wouldn’t be a
global platform without a variety ofsizes and types of content owners. But
there are specific needs and desires
unique to indies, and now that I’ve
joined Spotify myself, I work with anincredible team that’s dedicated tosupporting them. As Spotify’s Headof Independent Label Support, partof my job is to ensure that indies
are best utilizing the platform’s
many helpful tools and features.
Here are a few of my favourites.

Jen Masset Global Head of Independent
Label Support at Spotify

PLAYLIST SUBMISSION GIVESEVERY ARTIST A SHOT
Playlist Submission allows artists
and labels to submit unreleased
music directly to our editorial team
to be considered for a playlist. It’s asimplified and systemised way forthem to, in one click, reach our global
team of curators algorithmically.
This brings everyone to the table ina way that wasn’t possible before.
It also helps us find music in all
the niches and sub-genres andstay up to speed on global trends
we may not have had visibility into
otherwise. For example, a genre
like Digital Maskandi… how would
I have otherwise discovered that?

WINTEL

WITH SPOTIFY CODES, MUSIC ISJUST A SNAPSHOT AWAY
Spotify Codes offers a new andeasy way to share Spotify content
with your fans. It works like a QR
code: You just enter the link froma playlist, song, or anything else at
SpotifyCodes.com, and place theresulting image onto any marketing
materials. Fans can then scan it andimmediately access it in Spotify.

39

SPOTIFY FOR ARTISTS & SPOTIFYANALYTICS OFFER ULTIMATECONTROLNOW IN BETA: UPLOAD YOUR MUSICTO SPOTIFY

One of the top-requested features
Spotify for Artists and Spotify Analytics from artists has been the ability to
upload music directly onto Spotify.
are hugely important. They make it
Spotify for Artists recently unveiled
so that artists and their teams cana feature that does just this, and ismaintain control of their music. It’s
now being beta tested by a number
really simple to see song stats anddata, which helps artists get a sense of of US-based DIY independent artists.
The feature will roll out to more artists
their audience. They can also submit
in the near future, enabling them tosongs for playlist consideration,deliver their music straight to Spotify,
control their profile to better engage
plan for the perfect release day, andwith fans, promote their work, andenjoy full control over their metadata.
really get the most out of Spotify.

40“WHEN ARTISTS
AND LABELSEMBRACESTREAMING IN
THE RIGHT WAYS,EXPOSURE
CAN INCREASEEXPONENTIALLY.”HOW FANS CANDISCOVER YOUR MUSICOn top of creating tools andresources to help artists and labels
thrive, we’ve also created endlessways for your fans (and future fans)to discover more of your music.
Here are a few of my favourites:

PLAYLIST SUBMISSION GIVESEVERY ARTIST A SHOT

The labels and artists that I’ve seen
really thrive are the ones who’ve
invested in artist development. We,
as a platform, can enable discovery,In the overall ecosystem of the musicindustry, streaming plays an extremely but when someone hears that artist,
they want to know more about them,
important role. But it’s not the be-allwhat they stand for, what theirand end-all. You can’t just make yourmusic available on streaming services story is. There should be strong
branding, visuals, and personality
and then go to a deserted island andretire. You should be out there touring, conveyed quickly and easily. That’s
how you really succeed, and Spotify
you should be out there releasing
provides artists and their teams withmerch, you should be out there on
tools to help make that happen.
socials, engaging with your fanbase.
When artists and labels embracestreaming in the right ways, exposure
can increase exponentially. It helps
you sell more tickets and more vinyl,
and it’s going to help you engage withmore fans on social media, because
people have better opportunities todiscover your music and to enjoy it.

Spotify will always be an ally forindependent artists and labels.
We make it easy for them to tell theirstories in their own voices—andto do that on a scalable level. Our
flexibility and options allow them toget out there and find their fans. We
have been and will continue to be
their partner on the road to success.

DISCOVER WEEKLY:NEW MUSIC FRIDAY:

A weekly round-up of songs that
Spotify thinks fans will love basedon their listening history and thatof other Spotify fans with similar
tastes. It refreshes every Monday
and gets even better the more
you use the platform. It’s helped
me find some amazing songs
and artists I probably wouldn’t
have discovered on my own.

A flagship playlist that updates
weekly on Fridays with the hottest
new songs across many artists
and genres. I love discovering thelatest and greatest each week.

DAILY MIXES:The perfect line-up of tracks, basedon the different styles of music
the user regularly listens to, readyto play at the touch of a button.
Every user can have up to six, andI’m obsessed with all of mine.

RELEASE RADAR
Like New Music Friday, but
personalized. It’s my favourite
feature. I’m always adding tracks
from it into my own personal
playlists. I always recommendthat artists encourage their fans
to click the “Follow” button on
their artist page. That guarantees
that their new music on Spotify
is automatically added to theirfollowers’ Release Radar playlists.

WINTELESTABLISHED: 1996
HEAD OFFICE: HAMBURG, GERMANY
FOUNDERS: JEN THELE
CURRENT ROSTER: ATB, SCOOTER,LOUD LUXURY, EL PROFESSOR,
LOST FREQUENCIES41

SPOTIFY CASESTUDY: KONTOR
RECORDSWRITTEN BY JEN MASSET SPOTIFY

42“KONTORIS HEAVILYUTILIZINGSPOTIFY’STOOLS TOEXPAND
THEIR REACH
AND GAINPOPULARITYACROSS THE
GLOBE”

When I think of an indie label that’s
truly embraced all that Spotify has tooffer, I immediately think of Kontor
Records. Founded in Germany in
1996, Kontor grew from Hamburg’s
illustrious dance scene as an offshootof the popular nightclub of the same
name. With their own “Kontor Top of
the Clubs” playlist boasting over 400
thousand followers, Kontor is heavily
utilizing Spotify’s tools to expand theirreach and gain popularity across theglobe—to the benefit of their artists.
I asked Kontor about their favourite
Spotify tools and how the platform
has impacted the label’s growth sofar. Here’s what they had to say.

FANS FIRST
Fans First is Spotify’s global
reward program that celebrates all
the devoted super-fans (and there
are a lot) across the platform. It
provides dedicated listeners with
exclusive offers and invites–like a
pre-sale and exclusive concert with
Foxing or a limited edition vinyl
from Father John Misty himself–while supporting additional
revenue streams for artists.
For artists of all sizes, Fans First
offers an amazing opportunity
to connect with loyal listeners
and give them an opportunity
to invest in their favourite
artists. It’s a win-win.

AS A LABEL, YOU’VE TAKEN FULLADVANTAGE OF ALL THAT SPOTIFY
HAS TO OFFER. CAN YOU TELLME MORE ABOUT ITS IMPACT?
Streaming has developed intoa hugely important part of ourbusiness, so we invest considerable
time and energy in getting thisright. We are always eager to learn
more and try out new strategies.
Starley’s debut single, “Call On
Me,” came from our Australian label
partner. Spotify played a crucial rolein making it a hit through platform—
wide support for the Ryan Riback
remix. We did a lot of the groundwork
on radio–and video, of course–but
Spotify certainly helped in a new way.

WINTEL43“KONTOR HAS ALWAYS BEEN READY AND
WILLING TO EMBRACE NEW CHANNELSAND SERVICES TO PROMOTE AND
RELEASE MUSIC. THIS HAS HELPED TO
INCREASE BRAND AWARENESS AS
WELL AS SECURE MAXIMUM IMPACTFOR OUR MUSIC PROJECTS.”

WHICH OF SPOTIFY’SDISCOVERY TOOLS HAVE YOUUTILIZED THE MOST?
Features such as New Music
Friday (or NMF Cratediggers
in the case of electronic music
specifically) can give projects areal boost in the week of release.
We also focus on new playlists
across the full spectrum of danceand electronic music, so we try to becompletely up to date with all relevant
playlist features and identify where
each new play or playlist comes from.

WHAT ARE SOME OF THE LABEL’SGOALS FOR THE FUTURE?
Continuing to release high quality
dance and electronic music andhopefully have more hits! Kontor
has always been ready and willing toembrace new channels and services topromote and release music. This hashelped to increase brand awarenessas well as secure maximum impact
for our music projects. The two things
go together. Staying independent isalso important–this enables us to act
quickly and flexibly. Timing is key, so
we like to be in control of every stepin terms of getting our music heard.

WHAT ROLE DO YOU THINK SPOTIFYWILL PLAY IN THE SUCCESS OF
INDIES GOING FORWARD?
Spotify is already essential forindependent labels and distributors.
With regard to our home territory ofGermany, the physical and download
markets have been quite resilient but,of course, on a global scale streamingis leading the way. There will always
be room for other formats (we evenreleased a SCOOTER cassette lastyear) but it is absolutely essential
to be part of the conversation on
Spotify, as it’s the shortest route toconnecting with fans of our music.

44

KEY STATISTICS PROVIDED BY
WINTEL RESEARCH SHOW
WHAT AN INDEPENDENTLABEL LOOKS LIKE IN 2017.

AMOUNT OF PART-TIME STAFF

3.2

PART TIME STAFF

AVERAGE NUMBER OF DEPARTMENTS

2.7

DEPARTMENTS

WHAT ANINDEPENDENTLABEL LOOKEDLIKE IN 2017
AMOUNT OF FULL TIME STAFF

13.6

FULL TIME STAFF

WINTEL

45

ARTIST LOYALTYSTAFF LOYALTY

OF ARTISTSCHOOSE TO
RENEW THEIRCONTRACTS WITH
INDEPENDENTLABELS

42%

77%

OF STAFF HAVEBEEN THERE SINCE DAY 1

AVERAGE NUMBER OF ARTISTS

HOW LONG THE AVERAGE LABEL HAS BEEN IN OPERATION

14.9
YEARS
OVERSEAS INDEPENDENT REVENUES

31%

OF INDEPENDENTREVENUES COMESFROM OVERSEAS

46

THIS YEAR’S WINTEL SURVEY SHOWEDSTRONGLY THAT INDEPENDENT LABELSARE INTERNATIONALISING THEIR
BUSINESSES, AIDED BY THE GLOBALREACH OF STREAMING SERVICES AND
SOCIAL NETWORKS, AS WELL AS BY THE
HARD WORK OF THEIR ARTISTS AND
STAFF IN BUILDING FANBASES BEYOND
THEIR HOME COUNTRIES.

BREAKING BORDERS:
INDIE INTERNATIONAL
SUCCESSWRITTEN BY STUART DREDGE
This year’s WINTEL survey showedstrongly that independent labels areinternationalising their businesses,
aided by the global reach of streaming
services and social networks, aswell as by the hard work of theirartists and staff in building fanbases
beyond their home countries.
With the average independent now
getting 31% of their revenues fromoverseas – and a number getting
well over that percentage - WINtalked to some indies who’vebeen finding success abroad.
German classical label Berliner
Philharmoniker Recordings wasfounded in 2014 to release recordings
by the storied orchestra, which
already ran its own online-video
service, the Digital Concert Hall.
“Currently, we broadcast about
50 live concerts per season andhave more than 500 concerts in thearchive,” says label manager Felix
Feustel. The orchestra has also
worked hard on growing its social
media following, which currently
stands at 1.2 million people.
The label now distributes via an online
shop and to key retailers, while alsousing distributors for markets likeSouth Korea, Japan and the US.

“In a way, video streaming was andis the foundation of our success,but audio streaming is only an
add-on. The irony is that we havemore than 1.5 million monthly
listeners on Spotify, but right now,
if we exploited that potential, we
would only play into the hands of the
major labels who own the bulk ofour past catalogue,” says Feustel.
However, the label has been
focusing on going beyond standard
recordings: for example, by releasing
performances as Blu-ray discs
with multiple bonus videos, as wellas making recordings available inhigh-resolution audio formats andbeautifully-designed vinyl editions.
“Our elaborate ‘coffee table’ CD
editions sell for 39 to 79 Euros andwe sell more than 5,000 units of eachrelease. Our Beethoven symphonycycle (69 Euros) sold more than
15,000 copies and counting – andthe orchestra owns the full rights
for the future,” says Feustel.
“We are aware that the future
belongs to streaming, but we do not
generate relevant income from it. A
new orchestra recording can simply
not be financed with streaming. So
we are exploring and discussing theissue actively, but it is very difficult
to define a strategy,” he says.

WINTEL47

Felix Feustel Label Manager, Berliner Philharmoniker Recordings“Elaborate physical products, sold
via the right channels to the devoted
fans of the orchestra: that is thestrategy that has worked best for us.”
Another label that is finding successthrough both physical and digitalmeans is German jazz label ACT.
Just for new frontline albums
released so far in 2018, it has
sold more than 120,000 physicaleditions, 7,000 downloads anddone more than 8m streams.

Those online campaigns range fromFacebook & Instagram advertisingand videos to YouTube marketing,
SEO activities and online raffles,
adds Brandis, noting that ACT
has been producing much more
video content for these online
campaigns in 2018. Both marketing
channels are important.

“We still have a lot of ‘physical’customers and they need to find our
new releases in traditional marketing
channels. Beyond that there are a lot“The strategy is to combine offlineof young artists on our roster and ofactivities like public relations,course established artists looking foradvertisements, point-of-salenew audiences, we need to build andmarketing, price campaigns with retail develop profiles and strategies on allpartners and special formats, with
important online platforms,” he says.
narrow online campaigns designed“Streaming is growing, but for ourfor specific target groups,” says
niche it can’t compensate what was
managing director Andreas Brandis.
lost in physical and download overthe last years. Streaming delivers
important income, but only forhuge catalogues can it create avalue which is sufficient to financea company,” says Brandis.

“That’s one of the major challenges
for all small or middle companies.
One trend is still that a lot ofmusic lovers buy CD and vinyl.
That helped our success.”
For a label like ACT, international
success isn’t just about new platforms,
but is about expanding the services
it offers to its artists, as they target
ever-more-global fanbases. “With all
our experience and knowledge we willcontinue to be a sparring partner for
our artists and extend our business tomanagement and concert promoting.”
South African label Gallo Record
Company has seen streaming
services provide some of its
artists with a way to reach newfans around the world – and help
them play to larger audiences.

48

Jeremy Loops released his album
Critical As Water this year, forexample. “Outside of South Africa,
the album has done 12 million
streams on Spotify and sevenmillion on Apple Music,” says Rob
Cowling, general manager at thelabel. “He is South Africa’s moststreamed male artist in Spotify.”
Loops is now regularly touring
Europe and the US, with Australia
and Germany proving strong markets
too. He’s already got one of London’spremier venues, the O2 Academyin Brixton, booked for November
2019 – as part of a European tour
playing to nearly 35,000 fans in total.
Cowling lists other successes forthe label, from Paxton – who has
performed in Russia and Sweden, andis already eliciting interest from US
talent agencies – to Wonderboom, who
won the top award after competing
against acts from 14 other countries
at the Silk Road Indie Music Festival
in Chengdu, China. Josh Wantie(via a collaboration with Frenchelectronic duo FDVM) and veteranact the Parlotones have also been
winning new fans abroad in 2018.

Charlie Cunningham British Artist

Great live shows are a key part ofthis, of course, but Cowling saysthat the label has worked hard to
support its artists with the rightkind of marketing. “It’s a digitalstrategy that has heavily focused onsocial media, and then moved overto YouTube and building a workingrelationship with influencers that thenrolled out into conventional recordmarketing campaigns,” he says.
“Our main focus has always been
at home, and the strength of theAfrican catalogue and projected
continental growth,” adds Cowling.
“We do, however, plan to unlock much
untapped revenue through re-issues
and archive material worldwide.” And
like many independent labels, Gallois flexible in its dealmaking and withcarve-outs should its artists want topursue global opportunities that arise.
Another label with a healthyinternational case study is Dumont
Dumont in Sweden, with British
artist Charlie Cunningham.

“He just passed 120 million streams
in total, and has more than 1.9
million monthly listeners on Spotify,”
says founder Magnus Bohman.
Supporting this success? “A verystrong PR setup. Our distribution
did a very good job, and on top ofthat a well-oiled collaboration withCharlie’s management. We really
worked well together,” says Bohman.
“Streaming services like Spotify
helped us a lot. Getting on all of thoseplaylists at the same time Charlie wasout playing live all over the world plus
doing PR at the same time. Charlie
has converted many of the playlist
listeners into his own fans now.”
Bohman says that the successso far in 2018 has given Dumont
Dumont more confidence toinvest in more artists.

WINTELA VIEW FROM MARK DOWLING,
ABSOLUTE, A LABEL SERVICESCOMPANY, ON TODAY’S INDIE HIT
MAKERS AND WHAT MAKES A GOOD
MUSIC ENTREPRENEURS IN 2018.

49

TODAY’S
INDIE HIT
MAKERSWRITTEN BY MARK DOWLINGTODAY’S BEST MUSIC ENTREPRENEURS 2. THEY RECOGNISE THEIR LIMITSSHARE THESE 4 QUALITIES:
Much can be achieved by a skeleton
1. THEY PLAY TO THEIR STRENGTHS
It’s well documented that the
major labels simply don’t have theconfidence and freedom to take thekind of risks they once did. For young
upcoming artists and establishedreturning acts alike, more andmore, labels want to see a strong
finished product before they’rewilling to draw up a contract.
This has meant that A&R duties are
increasingly being left to others.
And it turns out there are a lot of
natural A&R men and women in themusic industry (see Steps panel).

staff or an industrious individual,
however the most successful indie
hit-makers realise that to meet agreat record’s true potential, theyneed a team of experts around them.
Many artists, managers and smaller
indie labels are turning to label
services not just because the model
works without putting copyrights up
for grabs, but because they are able toquickly plug into an established teamof experts in every sector and genre.
Through label services, individual
executives and small operations
are able to quickly enhance theirworkforce with a team that’s madeto order depending on the precise
needs of their specific campaigns.
The best music entrepreneurs
recognise that they need help but,
most importantly, they need theright kind of help. The skillset andexperience that’s needed to put
together a successful campaign
for a returning heritage act is very
different to that of a new artist
on the grime scene. They needa business model that allows
them to be nimble and flexible.

50“THE BEST MUSIC ENTREPRENEURS
RECOGNISE THAT THEY NEED HELP
BUT, MOST IMPORTANTLY, THEY
NEED THE RIGHT KIND OF HELP. ”
MARK DOWLINGABSOLUTE

3. THEY KEEP THEIROPERATIONS LEAN

With this new micro-businessapproach, keeping costs undercontrol is crucial. Where major
corporations have the luxury of being
The label services model also allows
able to sustain bulging departments
for control and flexibility when itof pluggers, promo execs, marketers
comes to overheads—something
and every other auxiliary role awhich is crucial for the modern-day
breed of music entrepreneur. Acts now campaign might need all year
rely on a multitude of different revenue round, those running a smaller
streams and year-round activity rather operation need to work differently.
than building everything around an
Understanding the importance ofalbum and riding the ebb and flow ofbuilding upon their resources whenthat cycle. And, again, it’s increasingly the time is right and then paring down
the artist and the team that sit atagain when the added infrastructure
the centre, with direct control overis no longer needed is crucial to longevery aspect of that business.
term financial success. Without thatability to plug into outside expertiseon a flexible basis, many indie music
entrepreneurs would be financiallycrippled by structural bulk that is
unnecessary most of the time.

WINTEL

4. THEY ARE REACTIVE
AT THE RIGHT TIME
That adaptability is also critical whenit comes to campaign strategy itself.
Because of the corporate structure,
major label bosses are constantly
having to satisfy shareholders,which often results in inflated sales
projections and budgets set instone at an early date, way before
there’s any evidence to suggest how
an album will sell in reality. Any
experienced music executive will
testify how quickly initial predictions
usually go out the window…

51

That kind of approach is at odds withthe way artist, management and label
partners like to work. They want tostart with a realistic target and build
a bespoke campaign that is costed
appropriately. Then, when things startworking and taking off, they want theflexibility to build upon that initial plan
and add to the budget accordingly.

For example, if you land a spot on
Graham Norton, you may want toquickly allocate more resource to
TV advertising following the show
to bolster the appearance. If yourstrategy and spend has been fixed wellbefore the album campaign has evenbegun, then you may not be able to
make the most of such opportunities.

52

Steps

In common with many of the truly
independent distributors and labels
services companies, at Absolute
Label Services, we’ve had thepleasure of working with some of
the most creative, driven and savvy
artist managers and indie label
executives in the business today.
Take Fascination’s Adam Klein andPeter Loraine. Absolute recently
worked with them to help Steps
secure a No.2 album with Tears On
The Dancefloor earlier this year.
It was certainly a successful
campaign—one spearheaded
by management and Stepsthemselves—but the task wasmade that much easier by having agreat set of songs to work with.

Fascination played a significant A&R
role in the making of the album,
bringing amazing writers on board, as
well as formulating a plan that would
mean that the album was self-funded
and control stayed with the creators.
Fascination could have carriedon alone and tried to kick-off thecampaign themselves. Thanks to
the digital revolution, the entire
route to market—from promotion to
distribution to retail—can in theory
be coordinated and executed from asingle laptop. But that’s not what theydid. We were delighted to be able tohelp by providing all the services toensure a fantastic result for the band.

WINTEL53

CHECKLIST FOR A DISTRIBUTION/LABEL SERVICES DEAL:

1. ASSETS BELONG TO…
From artwork to audio tometadata, establish who theassets required for digital
distribution belong to? If thedecision is made to move
distribution companies, canthose assets be easily andaffordably transferred, in DDEX
or another standard format?

2. DATA TRANSPARENCY
Is full data transparency acrossall services available? Can
clients view and understandtheir full earnings from one
platform to the next as close
to real time as possible?

3. BREAKAGE FROM DSPSWILL BE DISTRIBUTEDTO THE CLIENT?

5. ARE DSP TERMSNEGOTIATED WITH THE CLIENT
AT THE FOREFRONT?

Is the contractual position on
breakage from digital service
providers (where platforms pay
out a lump sum of money thatcannot be allocated specifically)clear? If breakage is received,
will this be shared with theclient, and on what basis?

Are the terms of agreement
between DSPs and distributor
or aggregator negotiated withthe artist and label clients’best interests in mind?

4. PAYOUTS FROM DSP IPOS WILL
BE DISTRIBUTED TO THE CLIENT?
If a DSP goes public (e.g.
Spotify), is the position clear on
how any monies received fromshares will be distributed?

“ANY EXPERIENCED MUSICEXECUTIVE WILL TESTIFY HOWQUICKLY INITIAL PREDICTIONSUSUALLY GO OUT THE WINDOW…”
MARK DOWLINGABSOLUTE

54

CONCLUSIONSWRITTEN BY ALISON WENHAM
There is much to learn from eachother, and WIN will be on hand tohelp, advise, provide and connect, as
we have been over the last ten years.
In these markets, even the definitionof an independent changes from one
country to the next, but what is clear
is that, definitions aside, there is aclear, simple and compelling desire
to work together and achieve theWhat we rather patronisingly currently
best our artists deserve, and in anlabel the Rest of the World (ROW) will,
environment that is transparent, fair
I am confident, become economic
and supportive of those principles.
powerhouses in their own right in
What is also clear is that the work
the future, and WIN’s role will be
WIN has done in defending andall-important in uniting and building
upholding the value of our rights
the Trade Associations of the future
has been very successful. No
in those territories. They are, of
longer is the sector regarded ascourse, not new in terms of music,
just new to the western markets
an afterthought, it is counted as aand vice versa. With You Tube’s mostvaluable and significant contributor to
popular videos coming from Brazil this the success of the supply chain andyear, it is a sure sign of the future.
at the heart of diversity and choicefor the consumer. As music discovery
and global diversification takes theindustry further and further awayfrom the controlled environment of
hit making and towards consumer
driven discovery, our sector willcontinue to thrive and prosper as
it produces the most exciting anddiverse music in the world.

The third WINTEL report demonstrates
the increasing power, authority andinfluence of the independent sector.
After twenty years building the sector
from being fragmented and disunited
to one of global authority, the creationof AIM, IMPALA, A2IM, AIF, Merlin
and WIN are all examples of what
can be achieved when we unite.

WINTELIN ORDER TO MEASURE THE SIZE OF
THE GLOBAL INDEPENDENT RECORDLABEL MARKET WE UTILISED TWO
KEY TOOLS:55

METHODOLOGYWRITTEN BY MARK MULLIGANGLOBAL INDEPENDENTLABEL SURVEY:

This enabled us to utilize invaluable
country level insight without revealing
any confidential, company level detail.
As an additional step compared toDuring 2018 WIN and MIDiA fielded aprevious editions, we factored in Artist
major survey to independent record
Direct(i.e. DIY Artist) revenue. To do thislabels across the globe. The survey
wetook
the Artist Direct revenue that
addressed issues including the size
MIDiA
had
previously identified andof the business, releases and genres,strippedout
the portion that may alreadypeople employed, A&R spend, use ofbetrackedbythe IFPI via streaming
distributors, details of distributors
servicereports.
This was then added toand rates paid to them etc. It also
theindependentlabel revenue as part ofincluded detailed questions aboutthenon-major
revenue.
Additionallabel revenue, across all formats,factorsthat
weutilizedinthe modellingin volume and revenue terms.
process included, but were not limited to:
Questionnaires were distributed to the calculating national market shares oflabels by local trade associations andindividual labels, identifying what share
were returned directly to MIDiA forof sales that were domestic, measuring
analysis. The results present uniquesales via distributors, analysing
picture of the global independent
distributor revenue shares and splittinglabel market and acted as a key
this by domestic versus international.
input for the market share model.
MIDiA additionally leveraged national
independent label market data from
GLOBAL MARKET SHARE MODEL:
local trade associations and other bodies.
All of these inputs were used to create
The first stage of the model entailed
establishing total recorded music market non-major record label market sharevalues (i.e. including major label revenue) figures for each country and additionallyfor each product category within eachby product format at country level using
country.
To ensure that there was nonational trade association and IFPI data.
doublecountingof revenue, international
After this, independent label data fromrevenueforeachlabel was only counted
the survey was aggregated up to aasoverseasrevenue
and wascountry level and fed into the model
appropriately
attributed
to respectiveat a product level by country.
international markets. The resulting
interim dataset was then reviewed by amix of leading independent labels,
trade associations and other bodies.

56

MODEL
DATA
WRITTEN BY MARK MULLIGAN

Total Recorded Music Revenue ($ Million)
Total Market

Total Recorded Music Revenue Share
MajorsIndependents
US

MajorsIndependents

62%

38%

US

5,950

3,664

2,286

Canada

440

332

108

Canada75%

25%

Belgium

66%

34%

Belgium

122

81

41

Denmark

138

111

27

Denmark

80%

20%

Finland

80

59

21

Finland

74%

26%

France

929

637

292

France69%

31%

Germany

1,330

894

436

Germany

67%

33%

Italy

249

175

74

Italy

70%

30%

Netherlands

271

176

94

Netherlands

65%

35%

Norway

139

106

33

Norway

76%

24%

Spain

206

175

31

Spain

85%

15%

Sweden75%

25%

Sweden

200

150

50

UK

1,315

1,012

303

UK

77%

23%

Argentina

71%

29%

Argentina

131

93

38

Brazil

298

184

114

Brazil

62%

38%

Chile

42

27

15

Chile

65%

35%

Australia

415

277

138

Australia

67%

33%

Japan

2,754

1,008

1,746

Japan

37%

63%

South Korea

501

83

418

South Korea

17%

83%

Other markets

1,862

1,199

663

Other markets

64%

36%

Global Total

17,372

10,443

6,930

Global Total

60%

39.90%

WINTEL57

Physical Recorded Music Revenue ($ Million)
Total Market

MajorsPhysical Recorded Music Revenue Share
Independents
US

MajorsIndependents

69%

31%

US

906

627

279

Canada91

69

22

Canada76%

24%

Belgium

68%

32%

Belgium

40

27

13

Denmark

10

81

Denmark

85%

15%

Finland9

7

1

Finland

88%

12%

France

339

251

88

France74%

26%Germany

574

382

192

Germany

67%

33%

Italy

96

72

24

Italy

75%

25%

Netherlands

60

34

26

Netherlands

57%

43%

Norway13

94Norway

70%

30%

Spain

53

46

6

Spain

88%

12%

Sweden80%

20%

Sweden

20

16

4

UK

402

315

88

UK

78%

22%

Argentina

11

7

4

Argentina

62%

38%

Brazil16

10

6Brazil

60%

40%

Chile

5

3

1

Chile

68%

32%

Australia

78

55

23

Australia

70%

30%

Japan

2,008

741

1,267

Japan

37%

63%

South Korea

186

13

173

South Korea

7%

93%

Other markets

331

261

70

Other markets

79%

21%

Global Total

5,246

2,953

2,293

Global Total

56%43.70%

MajorsIndependents

Download Revenue ($ Million)
Total Market

Download Revenue ShareUS

MajorsIndependents

63%

37%

US

944

594

350

Canada80

60

20

Canada75%

25%

Belgium

67%

33%

Belgium1073Denmark

4

3

1

Denmark

83%

17%

Finland1

10

Finland

76%

24%

France40

26

15France64%

36%Germany

114

81

33

Germany

71%

29%

Italy

16

11

5

Italy

69%

31%

Netherlands

8

5

3

Netherlands

64%

36%

Norway303Norway

9%

91%

Spain

7

5

1

Spain

80%

20%

Sweden77%

23%

Sweden

3

2

1

UK

146

113

33

UK

77%

23%

Argentina

63%

37%

Argentina

1

1

0Brazil5

3

2

Brazil

65%

35%

Chile

1

0

1

Chile

35%

65%

Australia

75

51

25

Australia

67%

33%

Japan

278

101

176

Japan

37%

63%

South Korea

9

1

7

South Korea

14%

86%

Other markets

110

67

43

Other markets

61%

39%

Global Total

1,854

1,131

722

Global Total

61%39.00%

58

Streaming Revenue ($ Million)
Total Market

Streaming Revenue Share
MajorsIndependents
US

MajorsIndependents

56%

44%

US

3,372

1,888

1,484

Canada

201

145

55

Canada72%

28%

Belgium

62%

38%

Belgium

34

21

13

Denmark

73

57

16

Denmark

78%

22%

Finland

42

27

15

Finland

64%

36%

France

270

154

116

France57%

43%

Germany

355

243

112

Germany

68%

32%

Italy

74

51

23

Italy

69%

31%

Netherlands

127

85

41

Netherlands

67%

33%

Norway95

80

15Norway

85%

15%

Spain

92

74

17

Spain

81%

19%

Sweden74%

26%

Sweden

141

104

37

UK

501

382

119

UK

76%

24%

Argentina

39

24

15

Argentina

61%

39%

Brazil

163

94

69

Brazil

58%

42%

Chile

22

14

8

Chile

62%

38%

Australia

205

129

75

Australia

63%

37%

Japan

265

83

182

Japan

31%

69%

South Korea

282

33

249

South Korea

12%

88%

Other markets

1,009

610

399

Other markets

60%

40%

Global Total

7,361

4,301

3,061

Global Total

58%

41.60%

MajorsIndependents

Total Digital Revenue ($ Million)
Total Market

Total Digital Revenue ShareUS

MajorsIndependents

57%

43%

US

4,451

2,557

1,894

Canada

285

208

76

Canada73%

27%

Belgium

63%

37%

Belgium

45

28

17

Denmark

77

60

17

Denmark

78%

22%

Finland

43

28

15

Finland

65%

35%

France

318

185

133

France58%

42%

Germany

472

327

146

Germany

69%

31%

Italy

90

62

28

Italy

69%

31%

Netherlands

135

91

44

Netherlands

67%

33%

Norway98

75

23

Norway

77%

23%

Spain

101

82

19

Spain

81%

19%

Sweden74%

26%

Sweden

144

107

38

UK

652

499

153

UK

77%

23%

Argentina

61%

39%

Argentina

41

25

16

Brazil

179

104

75

Brazil

58%

42%

Chile

24

16

8

Chile

65%

35%

Australia

283

208

75

Australia

73%

27%

Japan

574

198

376

Japan

35%

65%

South Korea

294

35

259

South Korea

12%

88%

Other markets

1,118

655

462

Other markets

59%

41%

Global Total

9,424

5,549

3,876

Global Total

59%

41%

WINTEL59