MEMBER
SURVEY



2013

 2013  Merlin  Member  Survey  

Merlin  conducted  a  global  survey  on  an  anonymous  

basis  looking  at  the  digital  revenues  of  its  members  
who  collec8vely  represent  the  most  commercially  
significant  basket  of  rights  outside  of  those  held  by  
the  major  labels.  
 
Merlin’s  members  include  the  world’s  most  
successful  independent  labels  and  distributors,  from  
35  countries.  These  companies  comprise  around  
10%  of  the  digital  market.    
 
How  has  your  streaming/subscrip=on  revenue  
changed  between  2011  and  2012?    
 
Increased  by  over  100%   33.33%  
Increased  by  75-­‐  100%   14.04%  
Increased  by  50  -­‐  75%   17.54%  
Increased  by  25  -­‐  50%   14.04%  
Increased  by  less  than  25%   13.16%  
Remained  Unchanged   7.02%  
  Decreased   0.88%  

 
v  92.11%  of  respondents  saw  an  increase  in  2012  as  
compared  to  2011  
v  64.91%  saw  an  increase  of  over  50%  
v  33.33%  saw  an  increase  of  over  100%  
v  0.88%  saw  a  decrease  
 
 How  has  your  streaming/subscrip=on  revenue  changed  between  2011  and  2012?  
 
%  of  respondents    
0.00%   5.00%   10.00%   15.00%   20.00%   25.00%   30.00%   35.00%  

Increased  by  over  100%   33.33%  

Increased  by  75-­‐  100%   14.04%  

Increased  by  50  -­‐  75%   17.54%  

Increased  by  25  -­‐  50%   14.04%  

Increased  by  less  than  25%   13.16%  

Remained  Unchanged   7.02%  

Decreased   0.88%  
 How  has  your  a-­‐la-­‐carte  download  revenue  
changed  between  2011  and  2012?    
Increased  by  over  100%   8.40%  
Increased  by  75-­‐  100%   1.68%  
Increased  by  50  -­‐  75%   11.76%  
Increased  by  25  -­‐  50%   19.33%  
Increased  by  less  than  25%   22.69%  
Remained  Unchanged   22.69%  
Decreased   13.45%  

 
v  63.87%  of  respondents  saw  an  increase  in  
2012  as  compared  to  2011  

v  21.85%  saw  an  increase  of  over  50%  

v  8.40%  saw  an  increase  of  over  100%  

v  13.45%  saw  a  decrease  

 
 How  has  your  a-­‐la-­‐carte  download  revenue  changed  between  2011  and  2012?  
 
%  of  respondents    
 
0.00%   5.00%   10.00%   15.00%   20.00%   25.00%  

Increased  by  over  100%  

Increased  by  75-­‐  100%  

Increased  by  50  -­‐  75%  

Increased  by  25  -­‐  50%  

Increased  by  less  than  25%  

Remained  Unchanged  

Decreased  
How  has  your  total  business  revenue  changed  
between  2011  and  2012  
Increased  by  over  100%   7.83%  
Increased  by  75-­‐  100%   2.61%  
Increased  by  50  -­‐  75%   10.43%  
Increased  by  25  -­‐  50%   25.22%  
Increased  by  less  than  25%   26.96%  
Remained  Unchanged   13.91%  
Decreased   13.04%  

v  73.04%  of  respondents  saw  an  increase  in  

2012  as  compared  to  2011  
v  20.87%  saw  an  increase  of  over  50%  
v  7.83%  saw  an  increase  of  over  100%  
v  13.04%  saw  a  decrease  
 
 How  has  your  total  business  revenue  changed  between  2011  and  2012?  
 
%  of  respondents    
0.00%   5.00%   10.00%   15.00%   20.00%   25.00%   30.00%  

Increased  by  over  100%  

Increased  by  75-­‐  100%  

Increased  by  50  -­‐  75%  

Increased  by  25  -­‐  50%  

Increased  by  less  than  25%  

Remained  Unchanged  

Decreased  
Streaming  Revenue  as  Percentage  of  Total  
Digital  Revenue  

What  percentage  of  your  digital  revenue  does  streaming/subscrip8on  represent?    

 
For  labels  where  USA  is  primary  source  of  digital  revenue:  
   
-­‐  Streaming  Revenue  is  less  than  25%  of  Digital  Revenue-­‐  54%    
-­‐  Streaming  Revenue  is  between  25-­‐50%  of  Digital  Revenues  -­‐  30%    
-­‐  Streaming  Revenue  is  over  50%  of  Digital  Revenues  -­‐  16%    
 
For  labels  where  Europe  is  primary  source  of  digital  revenue:  
 
-­‐  Streaming  Revenue  is  less  than  25%  of  Digital  Revenue-­‐  48%    
-­‐  Streaming  Revenue  is  between  25-­‐50%  of  Digital  Revenues  -­‐  22%    
-­‐  Streaming  Revenue  is  over  50%  of  Digital  Revenues  -­‐  30%    
 
Across  all  territories:  
 
-­‐  Streaming  Revenue  is  less  than  25%  of  Digital  Revenue  -­‐  53%    
-­‐  Streaming  Revenue  is  between  25-­‐50%  of  Digital  Revenues  -­‐  23%    
-­‐  Streaming  Revenue  is  over  50%  of  Digital  Revenues  -­‐  24%    
 
 What  percentage  of  your  digital  revenue  does  
streaming/subscrip=on  represent?    

PRIMARY  DIGITAL  REVENUE  SOURCE   PRIMARY  DIGITAL  REVENUE  SOURCE    

USA   EUROPE  
60%   60%  

50%   50%  

40%   40%  

30%   30%  

20%   20%  

10%   10%  

0%   0%  
Less  than  25%   25-­‐50%   over  50%   Less  than  25%   25-­‐50%   over  50%  

%  of  respondents   %  of  respondents  

 
 Growth  of  Streaming  Services  
•  Merlin  Streaming  revenue  more  than  doubled  in  2012.  

•  All  major  streaming  services  Merlin  is  in  business  with  

have  individually  shown  significant  revenue  growth  in  
2012.    

•  Merlin  expects  to  receive  over  $65m  in  streaming  

revenues  alone  in  2013  from  its  17  current  partners.  

•  It  is  increasingly  clear  that  the  services  that  have  

properly  understood  the  value  of  independent  repertoire  
to  their  customers  are  the  ones  that  are  succeeding.  

 
 Conclusions  
•  The  streaming  subscrip8on  business  is  a  growing,  and  substan8al,  business.  
•  This  growth  appears  to  be  incremental  rather  than  subs8tu8onal.  
•  Freedom  of  choice  created  by  limitless  ‘shelf’  space  and  a  prolifera8on  of  
social  media  tastemaker  filters  is  leading  fans,  no  longer  herded  by  the  
expensive,  8ghtly  controlled  media  channels  and  store  fronts  of  physical  retail,  
to  discover  and  enjoy  more  music  than  ever  before.  
•  The  nature  of  the  new-­‐genera8on  services  has  put  a  lot  of  control  back  into  
the  hands  of  rights  owners.    
•  As  a  result  independents  have  a  more  open  market  and  are  performing  far  
be^er  in  the  subscrip8on  space  than  they  have  historically  in  the  physical  or  
download  space.  
•  This  is  borne  out  by  the  figures  we  have  seen  in  our  survey,  as  well  as  by  the  
increasing  success  independents  are  enjoying  in  the  mainstream  charts  across  
the  globe.  
•  The  move  from  a  unit-­‐based  business  to  an  access  based  business  is  crea8ng  a  
new  music  economy,  and  a  new  set  of  consumers  who  don’t  behave  the  way  
consumers  in  the  physical  or  download  markets  do.