[UPDATED] A new study commissioned by the Worldwide Independent Network (WIN) looks at the global market share of independent music labels based on copyright, rather than distribution, and reveals a very healthy indie sector on the rise.
A new WINTEL 2017 report shows indie labels capturing 38.4% of the global recorded music market.
Commissioned by trade group WIN to analyze the global economic and cultural impact of the independent music sector, it was authored by Mark Mulligan of MIDiA Research and edited by Dave Roberts of MBW. The survey was completed by 660 respondents including labels and distributors from 26 countries.
The report focuses on market share based on rights ownership (copyright) rather than traditional measure of distribution, which in a sector dominated by major label owned distributors, offers a distorted snapshot. Independent companies often use major labels or companies owned by majors to distribute their music, and those major labels usually include revenues from the distribution of that indie music in their own market share.
All of this becomes important because market share is used by digital music companies like Apple, Google and Spotify in negotiations with the indie sector and often determines the levels of remuneration paid by these companies to music right holders.
"The WINTEL 2017 report tells the story of another strong year for the independent sector. It has seen solid growth overall and an astonishing increase in streaming revenues. Both are trends we are confident will continue," says Alison Wenham, CEO of WIN.
Key WINTEL 2017 Report Findings
- Based on rights ownership, the global market share of independent record labels has increased since 2015 by 0.9% to 38.4%, representing global revenues of $6billion in 2016. This is an increase of 6.9% on the previous 12 months.
- Although global independent label market share increased by 0.9% to 38.4%, changes at country level were as diverse as the market share picture itself.
- The US saw the largest single swing in favour of independents, increasing 1.7% to 37.3%.
- South Korean independents further increased their grip on the Korean market, with strong results from leading independents resulting in total market share growth of 0.6% up to 89.1%.
- The independent share declined slightly in Japan, down 0.3% to 63.3%, with a number of leading local companies registering significant revenue losses in 2016.
- Many European markets, including key territories such as the UK and Germany, saw independent market share fall slightly, despite overall revenue growth.
The report makes clear that digital music, and streaming in particular, continues to create exciting opportunities for independent labels and that in virtually every country, independent labels continue to record higher market share in streaming than they do in physical formats.
80% Streaming Growth
As with the majors, streaming drove indie growth in the global recorded music market. 2016 was the second consecutive year of industry growth (5.9%). Prior to 2015 it had endured 15 years of decline.
- Measured in isolation, streaming grew 60.4% in 2016.
- It now accounts for 59% of all digital revenues
- Digital as a whole now accounts for 50% of the total market.
Independent label streaming revenues grew by 80.4% in 2016, reaching $2.1 billion, up from $1.2 billion in 2015. This growth was slightly greater than the 78% by which the entire market grew, so independent label market share of streaming revenues increased by 0.6%, up from 39.4% to 40% over the same period.
Obstacles Still Remain, says A2IM CEO
“It is truly gratifying to see both U.S. and global independent market share increase again. We must continue to strive for a level playing field where the best releases rise to the top and where the digital services that respect copyright do not suffer unfair competition from those that co-opt our rights, says Richard James Burgess, CEO of A2IM
"Even as we celebrate we must remain vigilant," Burgess warns. "We are fighting our way out of a deep hole created by copyright abusers and we have a long climb to get revenues for creators and producers back to where they should be.”