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Wintel Worldwide Independent Market Report 2018 2 Wintel 3 4 WINTEL 1 THE GLOBAL ECONOMIC & CULTURAL CONTRIBUTION OF THE INDEPENDENT RECORD INDUSTRY WINTEL WORLDWIDE INDEPENDENT MARKET REPORT 2018 2 WINTEL 3 4 THE CURRENT WIN TRADE ASSOCIATION MEMBERS ARE: A2IM US ADISQ CANADA ABOUT WIN ABMI BRAZIL AIM UK AIR AUSTRALIA AMAEI PORTUGAL ASIAR ARGENTINA AUDIOCOOP ITALY HENRIETTE HEIMDAL PROJECT MANAGER, WIN BIMA BELGIUM The Worldwide Independent CIMA CANADA Network (WIN) is the coordinating body for national independent DUP DENMARK trade associations representing the recorded music industry around IMCJ JAPAN the planet. Launched in 2006 in FONO NORWAY response to global business, creative, and market access issues faced IMI CHILE CHILE by the independent sector, WIN collectively advocates, instigates, IMPALA EUROPE and facilitates for its membership. IMNZ NEW ZEALAND INDIECO FINLAND INDIESUISSE SWITZERLAND LIAK SOUTH KOREA PIL ISRAEL PLATFORMA CZECH REPUBLIC IN ADDITION TO THE NETWORK OF PMI ITALY ASSOCIATIONS, WIN HAS A NETWORK OF LOCAL REPRESENTATIVES FROM RUNDA BALKANS TERRITORIES WHERE THERE IS CURRENTLY SOM SWEDEN NO TRADE ASSOCIATION, INCLUDING: STOMP NETHERLANDS CARIBBEAN NIGERIA UFI SPAIN CHINA POLAND UPFI FRANCE INDIA ROMANIA VTMOE AUSTRIA IRELAND SOUTH AFRICA VUT GERMANY MALAYSIA VIETNAM WINTEL 5 FOR MORE INFORMATION PLEASE VISIT: WIN GRATEFULLY ACKNOWLEDGES MIDIARESEARCH.COM MUSICALLY.COM THE ASSISTANCE PROVIDED BY WINFORMUSIC.ORG EVERYONE WHO HAS CONTRIBUTED TO WINTEL 2018 DESIGN BY OSTREET.CO.UK MIDIA RESEARCH MUSIC ALLY MIDiA Research is a boutique media Music Ally is a knowledge company. and technology analysis company. We have more than 15 years worth of information, experience and data Mark Mulligan is the Managing on the global music business. Director of MIDiA Research and a long term media and technology analyst Our daily news and weekly insight and a leading thinker on the music briefings cover markets, technologies, industry’s digital transition. Mark has trends and viewpoints that are 15 years of media business analysis shaping the modern industry. We are and consulting experience, working also the leading training provider with leading global media, technology on digital growth and development and device companies. Mark heads up in the music industry, and work MIDiA’s music research and oversees with artists, labels and managers all of MIDiA’s research output. Mark is at all levels on digital marketing the author of the industry leading blog strategy and campaign execution. Music Industry Blog. He is also author We also organise and run our own of ‘Awakening: The Music Industry In events, including the Sandbox Summit The Digital Age’ the definitive account music-marketing conferences, of the rise of the digital music market. and (in partnership with Music Biz) Karol Severin is MIDiA’s lead analyst the NY:LON Connect conference for research on the mobile content in London and New York. economy. Karol’s research covers all aspects of mobile content including the mobile app economy, freemium strategy, mobile consumer segmentation, payment tactics and mobile discovery. Prior to joining MIDiA Karol gained experience in a number of marketing and research roles and as a technology start up founder. Karol is based in their Berlin office. 6 CONTENTS THE FUTURE IS BRIGHT FOR ABOUT WIN INDIES ON SPOTIFY 4 38 JEN MASSET INTRODUCTION WHAT AN INDEPENDENT 7 ALISON WENHAM 44 LABEL LOOKED LIKE IN 2017 BREAKING BORDERS: INDIE KEY FINDINGS INTERNATIONAL SUCCESS 8 46 STUART DREDGE INDEPENDENT MARKET ANALYSIS CONCLUSION 10 STUART DREDGE 54 ALISON WENHAM MERLIN TURNS 10 AND LOOKS AHEAD METHODOLOGY 16 STUART DREDGE 55 CASE STUDY: 23 CIGARETTES AFTER SEX 56 MODEL DATA TALKING TO POWER: WHY THE INDEPENDENT VOICE MATTERS 29 STUART DREDGE WINTEL 7 INTRODUCTION ALISON WENHAM CEO, WIN As 2018 draws to a close, we are An average of 76% of artists choose delighted to publish the third edition to renew their contracts with their of WINTEL which maps the global independent record company. This market share of the independent is a sure sign of a successful and recorded music sector using copyright enduring creative partnership as well ownership rather than distribution as a successful business alliance. as the measurement criteria. Also causing the global industry 2017 established the highest market to sit up and take note in 2018 share for the sector since the early is the rapid rise of the so-called nineties when scores of independent emerging markets with China companies were acquired and enjoying a 36% rise in revenue removed from the indie sector. growth , Asia & Australasia seeing Increasing from around 20% in 1998 a 5.4% spike in revenue and to 39.9% in 2017, during the most streaming growth of 38%, while turbulent period of the industry’s Latin America powers ahead with history, is an astonishing achievement. overall growth of 17% and an almost 50% rise in streaming revenues. As always we make the case that measuring music industry market The speed at which these markets are share by copyright ownership gaining influence both commercially continues to be the most legitimate and culturally has surprised everyone method as distribution is and independent companies have interchangeable and involves only a played and continue to play a major modicum of risk, whereas investing role is what is a hugely positive in the creation of a copyright in the development for the global industry. first place is the biggest risk that In conclusion it has been another any artist or music entrepreneur can challenging twelve months for our take. Getting it to market is thereafter industry on a numberr of levels but a question of choice for the artist. we have emerged with powerful new Choice is now the most defining legislation to protect our interests, feature of the global music industry— fantastic growth in some unexpected artists have every imaginable route territories and increasing support to their fans, from direct uploads to from music fans who have continued full service contracts, but what is to enjoy and engage with the clear from the report is that once an amazing music coming out of the artist has signed to an independent worldwide independent community . label, they choose to stay. 8 IN ORDER TO TAKE THE PULSE OF THE GLOBAL INDEPENDENT RECORD LABEL MARKET WIN COMMISSIONED MIDIA TO CONDUCT A MAJOR GLOBAL SURVEY OF KEY INDEPENDENT LABELS ACROSS THE WORLD. (MORE DETAILS ON THIS SURVEY CAN BE FINDINGS FOUND IN THE METHODOLOGY SECTION AT THE END OF THE REPORT). INDEPENDENT LABEL GROWTH 2017 MARKET SHARE INDEPENDENT LABELS GLOBAL MARKET SHARE SAW A 11.3% YEAR-ON- YEAR GROWTH THE REST OF THE INDEPENDENT LABELS MARKET, ONLY SAW A MARKET SHARE 2017* 10.2% GROWTH. * AN INCREASE FROM 38.4%IN 2016 DISTRIBUTION GROWTH IN STREAMING REVENUE 22.4% OF INDEPENDENT REVENUE THE INDEPENDENTS SAW A 46% INCREASE IN STREAMING REVENUES. DISTRIBUTED BY MAJORS WINTEL 9 ARTIST LOYALTY ARTIST LOYALTY % OF ARTISTS RENEWING 77% WITH THEIR LABEL OF ARTISTS (BY COUNTRY) CHOOSE TO RENEW THEIR CONTRACTS WITH INDEPENDENT LABELS ARTIST DIRECT REVENUES GLOBAL INDEPENDENT MARKET SHARE ARTISTS DIRECT INDEPENDENTS ARE POWERHOUSES IN REPRESENT JAPAN AND IN 2017 $101M SOUTH KOREA UP FROM $94M IN 2016 OVERSEAS INDEPENDENT REVENUES 31% OF INDEPENDENT REVENUES COMES FROM 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. THE GLOBAL THIS PIECE IS AUTHORED BY STUART DREDGE, WITH DATA INSIGHT FROM INDEPENDENT MARK MULLIGAN OF MIDIA. SECTOR IN NUMBERS WRITTEN BY STUART DREDGE Based on respondents from North The findings tell a clear and powerful America, Latin America, Europe and story: independents are the fastest- Asia who represent between them growing sector of the global recorded annual revenues of $1.9bn, the survey music industry; they are benefiting includes companies whose revenues from the industry’s transition from range individually from less than sales to streaming, and the loyalty $1k a year to more than $300m. they see from consumers, employees and artists alike demonstrably shows the respect and moral authority they command, at a time when fairness and transparency has never been more important, nor more talked about. Stuart Dredge Mark Mulligan WINTEL 11 INDEPENDENT LABELS OUTPERFORMED THE MARKET IN 2017 THE GLOBAL INDEPENDENT SECTOR IN NUMBERS INDEPENDENT LABELS SAW A 11.3% YEAR-ON-YEAR GROWTH THE REST OF THE MARKET, ONLY SAW A 10.2% GROWTH. WINTEL /MIDiA Research Independent Market Share Model (07/17) Independent labels grew from $6.2bn in 2016 to $6.9bn in 2017, which was THE FINDINGS TELL A CLEAR growth of 11.3% year-on-year. What’s important about that figure is that indies outperformed the overall music AND POWERFUL STORY: market, which grew by 10.2% last year. Independents also increased their INDEPENDENTS ARE THE total market share to 39.9% in 2017 with their growth outpacing that of the major labels, whose FASTEST-GROWING SECTOR revenues grew by 9.7% that year. OF THE GLOBAL RECORDED MUSIC INDUSTRY 12 MEASUREMENT OF THE MARKET BY OWNERSHIP NOT DISTRIBUTION 22.4% OF INDEPENDENT REVENUE DISTRIBUTED BY MAJORS WINTEL /MIDiA Research Independent Market Share Model (07/17) Nearly $1.5bn of independent label Some industry metrics count these Major-distributed independent music revenues came from labels and revenues within the major labels’ accounts for 8.6% of the total market, artists whose music was distributed market shares, but WIN believes that and 22.2% of the independents’ by the major labels—through their it is vital to measure the market not market share: it’s a significant sum in-house distributor and label- by who distributes music, but by who that should be assigned accurately. services divisions (Caroline for owns it: when independent labels Universal, The Orchard for Sony shoulder the risk of signing artists Music and ADA for Warner Music).
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