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WINTEL 1 THE GLOBAL ECONOMIC & CULTURAL CONTRIBUTION OF THE INDEPENDENT RECORD INDUSTRY WINTEL WORLDWIDE INDEPENDENT MARKET REPORT 2017 2 All the music you love. Try it free for 90 days. Subscription required MUSIC_WINTEL_Mag_297x420_AW.indd All Pages 11/08/2017 11:18 WINTEL 3 All the music you love. Try it free for 90 days. Subscription required MUSIC_WINTEL_Mag_297x420_AW.indd All Pages 11/08/2017 11:18 4 THE CURRENT WIN TRADE ASSOCIATION MEMBERS ARE: A2IM US ABOUT WIN ADISQ CANADA ABMI BRAZIL AIM UK AIR AUSTRALIA AIRCO SOUTH AFRICA AMAEI PORTUGAL AUDIOCOOP ITALY BIMA BELGIUM Unique in the history of the global For independent music companies music industry, WINTEL is a and their national trade associations CIMA CANADA representative organisation exclusively worldwide, WIN is a collective voice for the worldwide independent label and platform. When appropriate DUP DENMARK community. It was created in 2006 in it acts as an advocate, instigator response to business, creative and and facilitator for its continually FMPJ JAPAN market access issues faced by the growing membership. WIN is independent sector everywhere. also a focal point for collecting FONO NORWAY and sharing knowledge about the WIN’s membership stretches ILCJ JAPAN independent sector at national level. across every continent, with trade associations in all the well developed IMI CHILE CHILE music markets taking a particularly IMPALA EUROPE active role. WIN’s priorities are set by the global membership, and with IMNZ NEW ZEALAND IMPALA, included the creation of Merlin, the world’s first global rights INDIECO FINLAND licensing agency for new media. INDIESUISSE SWITZERLAND LIAK SOUTH KOREA IN ADDITION TO THE NETWORK OF PIL ISRAEL ASSOCIATIONS, WIN HAS A NETWORK PMI ITALY OF LOCAL REPRESENTATIVES FROM TERRITORIES WHERE THERE IS CURRENTLY SOM SWEDEN NO TRADE ASSOCIATION, INCLUDING: STOMP NETHERLANDS ARGENTINA MALAYSIA UFI SPAIN CARIBBEAN POLAND UPFI FRANCE CHINA ROMANIA VTMOE AUSTRIA IRELAND VIETNAM VUT GERMANY WINTEL 5 FOR MORE INFORMATION PLEASE VISIT: WIN GRATEFULLY ACKNOWLEDGES MIDIARESEARCH.COM WARWICK.AC.UK/CULTURALPOLICY THE ASSISTANCE PROVIDED BY WINFORMUSIC.ORG EVERYONE WHO HAS CONTRIBUTED TO WINTEL 2017 DESIGN BY OSTREET.CO.UK MIDIA RESEARCH THE UNIVERSITY OF WARWICK MIDiA Research is a boutique media Warwick Centre for Cultural and technology analysis company. Policy Studies is an internationally recognised centre of excellence for Mark Mulligan is the Managing postgraduate teaching and research Director of MIDiA Research and a long in the creative and media industries, term media and technology analyst committed to innovation, insight and a leading thinker on the music and engagement with business, industry’s digital transition. Mark has industry and the cultural sector. 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 author of ‘Awakening: The Music Industry In The Digital Age’ the definitive account of 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 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 WE ASKED PROMINENT CONTENTS INDEPENDENT INDUSTRY LEADERS: ABOUT WIN CASE STUDY 3: 4 40 FIERCE PANDA WHAT DOES IT MEAN TO BE INTRODUCTION CASE STUDY 4: 7 ALISON WENHAM 46 MAD DECENT INDEPENDENT? SEE THE RESPONSES WITHIN THE GREY KEY FINDINGS CASE STUDY 5: BOXES THROUGHOUT THE REPORT. 8 50 THIRD MAN RECORDS “TO ME, BEING AN INDEPENDENT MARKET CASE STUDY 6: INDEPENDENT MEANS 10 ANALYSIS 54 UNFD I’M NOT BEHOLDEN TO OTHER CONSTITUENTS STREAMING – AN CONCLUSION 16 INDEPENDENT OPPORTUNITY 58 ALISON WENHAM WHOSE INTERESTS ARE NOT NECESSARILY ALIGNED THE LOWE DOWN METHODOLOGY WITH MINE IN ORDER 21 ZANE LOWE INTERVIEW 59 TO MAKE DECISIONS. MY ONLY JOB IS FINDING CASE STUDY: MODEL DATA GREAT MUSIC AND HELPING 27 KOREA OPPORTUNITIES 60 TO BRING IT TO THE MARKETPLACE, AND AS CASE STUDIES AN INDEPENDENT I CAN DO 33 INDEPENDENT LABELS THAT AS EFFICIENTLY AS I CAN WITHOUT HAVING TO CASE STUDY 1: ARMADA MUSIC CHECK IN WITH SOMEONE 34 ELSE’S AGENDA.” CASE STUDY 2: PORTIA SABIN 37 BISCOITO FINO KILLING ROCKSTARS US WINTEL 7 INTRODUCTION ALISON WENHAM CEO, WIN WINTEL 2017 is the second report music, with the result that streaming produced for WIN, mapping the global revenue has increased sharply; market share of the independent the independents will remain sector at copyright, rather than firmly at the heart of this trend. distribution, level. The results are Independents do business in different impressive, with a 0.9% increase to ways to the majors. When music 38.4% from 2015, impressive growth becomes simply a product, with all in international revenue, which now the attendant cash flow forecasts and represents 32% of total income, and targets that major companies are streaming revenue recording a marked required to produce, it is likely to fail to increase of 80.4% on the previous year. meet expectations because, as we all Independent record companies know, music is a quixotic and joyously continue to produce the lion’s share unpredictable creature. Independents of new music, the most exciting area do business in different ways, following of the industry and where our sector their instincts, their gut and keeping excels. New artists are incredibly close to the fans and the market. “AN IDEAL POSITION OF well supported in every country in This approach is now being captured the world by creative entrepreneurs FREEDOM TO GROW AND and recorded through the WINTEL who know their music, their market reports. The following pages will take NURTURE DOMESTIC and the fans who seek out something you through the most impressive different from the mainstream. results from the global independent CONTENT, EXPANDED And it’s never been better. nation, covering the contribution LABELS SERVICES The usual challenges of achieving to culture, to creativity, to artistic SOLUTIONS AND THE commercial success don’t change endeavour and to solid economic in a competitive industry, but these returns to their closest partners, the ABILITY TO QUICKLY ADAPT challenges are mitigated by the artists with whom they work. WINTEL AND EVOLVE TO THE EVER- increasing reach into countries is a compelling sector success story. which were difficult to access before CHANGING LANDSCAPE IN the advent of streaming. Fans all over the world are discovering, THE LOCAL MARKETPLACE...” sharing and championing new NEIL GREENBERG, GALLO RECORDS SOUTH AFRICA 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 FOUND IN THE METHODOLOGY SECTION AT FINDINGS THE END OF THE REPORT). GLOBAL INDEPENDENT LABEL REVENUE INDEPENDENT MARKET SHARE $5.6 BILLION 2016 2015 38.4%* $6.0 BILLION* INDEPENDENT MARKET SHARE 2016 * AN INCREASE OF 6.9% FROM 2015 * AN INCREASE FROM 37.5%IN 2015 INDEPENDENT LABEL STREAMING REVENUE COUNTRY LEVEL INDEPENDENT MARKET SHARE RANGE: $1.2 BILLION 2015 89% 15% SOUTH SPAIN KOREA $2.1 BILLION* 2016 * AN INCREASE OF 80.4% FROM 2015 WINTEL 9 INDEPENDENT DISTRIBUTION REVENUE EMPLOYEE STATISTICS $1.2 BILLION SMALLER* INDEPENDENT LABELS AVERAGE (*LESS THAN $1 MILLION REVENUE) OF INDEPENDENT LABEL REVENUE WAS DISTRIBUTED VIA MAJOR RECORD LABELS OR MAJOR LABEL OWNED DISTRIBUTORS. DISTRIBUTION AVERAGE 4 EMPLOYEES MORE THAN +20 FREELANCERS 660 DIFFERENT LARGER* INDEPENDENT LABELS AVERAGE (*MORE THAN $20 MILLION REVENUE) DISTRIBUTORS AND LABELS WERE USED FOR DISTRIBUTION AVERAGE 102 EMPLOYEES BY RESPONDENTS +73 FREELANCERS TO THE WINTEL OVERSEAS REVENUES LABEL SURVEY. THE AVERAGE RESPONDENT THIS YEAR SAID THAT OVERSEAS REVENUES WERE 32% 10 INDEPENDENT MARKET ANALYSIS STREAMING FORMAT TRANSITION REVENUE WRITTEN BY MARK MULLIGAN THE STREAMING FORMAT TRANSITION IS In early 2017 MIDiA Research These figures represent the market DRIVING AN UPTURN IN BOTH MAJOR AND conducted a global survey of on an ‘ownership’ basis, meaning INDEPENDENT LABEL REVENUE. independent record labels revenues are attributed to the on behalf of the Worldwide company that owns the recording Independent Network (WIN). rather than the company that distributes the recording. Distributing The survey was completed by 590 music via third parties is a crucial respondents from 26 countries factor in the increasingly global music and the results represent the market, with smaller labels using most comprehensive assessment distributors and bigger labels to of the global independent record distribute their music into markets in label sector ever compiled. which they otherwise could not afford INDEPENDENT INDEPENDENT SHARE MARKET 37.5% 38.4% The data includes metrics of revenue to operate. The US is most often the by format, number of people employed key market that independent labels $9.6 directly and indirectly, A&R spend, seek to access via distributors. $9.4 marketing costs and use of third In recent years, the major record party distributors (internationally labels have established themselves and domestically). All of the data was as key players in this distribution collected on a strictly confidential space, by distributing independent basis and has been anonymised labels directly and indirectly, via $6.0 and aggregated to create the $5.6 subsidiary specialist distribution data presented in this report. companies, such as Sony’s The Global independent label revenues Orchard, Warner’s ADA and Universal’s grew by 6.9% in 2016 to reach $6.0 Caroline. In such instances, a billion, up from $5.6 billion in 2015.

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