Music Market Shares: Independent Labels And Artists Are Even Bigger Than You Thought
It has been a very long time for the reason that music business has been in such good condition. So lengthy, in actual fact, that there are not too many executives left who labored by way of the pre-crash days. 2021 was the yr during which the main label teams capitalised on the momentum, with Common and Warner going public, and Sony occurring a spending spree. This was off the again of a powerful 2020, during which the majors collectively generated $15.1 billion, giving them a market share of 66.1%. Thus far, so regular, however all shouldn’t be fairly because it appears. This market share could also be how the world sees the majors’ success, nevertheless it considerably underplays the income contribution of independents. MIDiA determined to repair that.
Initially of this yr MIDiA fielded a large-scale, world survey of independent labels, accumulating billions of {dollars}’ value of income figures. We predict that it’s the most complete survey of the independent sector executed but. Within the survey, we requested labels a few vary of things, which enabled us to color an entire image of the state of the independent sector in at this time’s music enterprise. Crucially, we collected detailed information on distributors, and that is the place the underneath reporting of independents comes into play.
The undoubted advantage of the streaming period is that it presents artists and labels of all sizes with the power to achieve world audiences. However most independent report labels do not need adequate scale nor assets to license and distribute on to streaming providers, and thus flip to the ever-expanding market of digital distributors. By no means shy to a chance, the main report labels have established themselves as key gamers on this house, distributing independent labels both straight or by way of their distribution arms. The worth that they ship to independents is evident, however the income goes by way of the majors’ accounts, and so main label revenues are boosted by independent income, thus inflating the market share of the majors. With the info we tracked in our independent label survey, we have been in a position to unpack this ‘embedded’ distributed independent label income from the majors’ whole to reach on the ‘precise’ market share of independents, primarily based on who holds the copyright, not merely on who distributes it.
Measuring market share on this ‘possession’ foundation, independent market share (which incorporates artists direct) goes from 33.9% (the ‘distribution’ foundation) to 43.1%, i.e., a further 9.2% of share. Or, put one other method, an addition of $2.1 billion. The independent share was up from 41.3% in 2018, and in 2020, independent income (on an ‘possession’ foundation) grew by 12% in comparison with a complete recorded music market progress of 12%. All of which signifies that independents (labels and artists) are a) bigger than customary business measures recommend, and b) rising quicker than the overall market and are thus rising market share. Which makes the majors’ technique even smarter. In the event that they weren’t so lively distributors of independents, they’d merely be ceding the entire income, as a substitute of, as they are, capturing some it and having the ability to report the market share as their very own.
These findings and rather more (together with regional market information and information on label operations (e.g., A+R, advertising and marketing, catalogue measurement, years in operation)), are available to MIDiA clients in this full report.
All independent labels that took half within the survey have already acquired a replica of the report. If you need a copy of subsequent yr’s version, you’ll want to participate within the subsequent survey once we announce it!
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