Merlin CEO Charles Caldas gave a keynote presentation at Toronto’s Canadian Music Week on Saturday (May 12), complete with power-point, before taking a seat on the panel called New Era For Indie Labels.
The head of the global digital rights agency for the world’s independent label sector told his audience, “We announced in August last year that we’ve paid, since we started the organization, $1 billion to independent labels.”
Merlin was created by the independent sector “to address the challenges of the move from a regional market to a global market that was being brought about by the rise in digital services,” he said, and today represents more than 20,000 labels and distributors from 53 countries and all continents.
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Caldas, who made Billboard‘s 2018 Power 100 list, delivered a presentation on the first decade of Merlin.
“We’re really trying to use this 10th year landmark to look back and understand how the market has changed and evolved and where we’ve gotten to,” he said, “but more importantly where are we going and how can we use what we’ve learned in the last 10 years to try and navigate the next set of changes. Because if anything is certain in the digital music marketplace, it’s that it’s a state of constant change, innovation and flux.”
Cutting right to the chase, Caldas began with the bucks, showing a slide indicating that in the 2012-2013 fiscal year Merlin “turned over around $45 million” to its members. Since, revenues have grown tenfold and, now, projections into the middle of this year are almost $500,000.
“We actually think we’ll get somewhere between $470 million and $500 million,” Caldas said. “To be clear, this is revenues only from audio streaming and only for the independents represented by Merlin.”
Caldas said each year the market is becoming more diverse in terms of the territories and “incredibly more lucrative.” He added that Latin America is the fastest growing region for Merlin members.
“Just to give you some context of what we thought back in 2007,” he said, “when we were putting this together, we did these projections of what the business might look like and what we would have our measures of success and our top line measure of success was if we could get to $10 million to $15 million a year, we felt we had something.
“I think you know being where we are now is not in that original game plan.”
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He took a look at Canada — which was late to entry in the digital market — and said since the start of 2015, there has been “an incredibly upward slope in terms of additional volume coming into the market and additional money coming into the market every month.”
He added that what has “surprised us the most” is the value coming from markets that were “practically zero value to independents operating in the Western market place,” namely Latin America, Southeast Asia and China, which some 20 years ago were “effectively closed to anyone other than the superstar acts,” Caldas said.
On the New Era For Indie Labels panel, the three company reps reacted to those figures and answered if it was something they experienced on a daily basis in their business.
Laura Dath-Lienenkamper, Ferryhouse Productions, Hamburg, Germany: “Yes. Definitely. We have for example one Germany band, they are doing electronic music, they sing in English so that makes it easier, but still we figured out that they’d work really well in the Latin American market, so that’s just one example. It’s way easier for us to work outside of Germany and Europe and to really get our artists streaming into a lot of different markets, so I think the numbers really reflect our situation as well.”
Justin West, founder & president, Secret City Records, Montreal, Canada: “Absolutely, I was actually mentioning to Charles last night that one of our artists Patrick Watson just did a 10 day tour of India last November, which I don’t think would have happened five years ago.”
Nick Blandford, managing director, Secretly Group, Bloomington, Indiana: “Yeah, very much the same thing. The point that Justin made is important, that the available data from streaming from these territories is proof of concept that artists can go and tour and that it’s sustainable, because of like Brazil and Mexico. Those are both top 10 territories for us when we look at our data. So it pairs out almost identically to what Charles was laying out for the entire community.”