New research undertaken by The Worldwide Independent Network (WIN), the organization that represents the interests of the global independent music community has provided the most accurate picture to date of the global value of the independent music sector.
The new report, entitled WINTEL, was commissioned by WIN to analyse the global economic and cultural impact of the independent music sector. It is authored by Mark Mulligan of MIDiA Research in conjunction with Dr. Chris Bilton from Warwick University’s Centre for Cultural Policy
Key findings from the research include the fact that, based on rights ownership, the global market share of independent record labels is 37.6%, representing $5.6 billion in 2015.
Beneath the global figure there is a hugely diverse range of national trends, with independent label market share ranging from just 16% in Finland up to 88% in South Korea.
The report focusses on the criterion of value ‘based on rights ownership’ when analyzing market share. This is an important distinction because where independent companies use major labels in various territories around the world to distribute their music, the major labels include the value of revenues derived from the distribution of independently owned rights into the label’s assessment of the majors’ own market share. Most independent labels do not have the international infrastructure needed to compete globally. The WINTEL report establishes that approximately 72% use international distributors and 52% use major labels or major label owned distributors. The claiming of market share by international corporations, which should be attributed to independent right holders, distorts the true picture of market value. WINTEL’s analysis by reference to rights ownership provides a much more accurate overview of the marketplace.
It is also important because market share Is used by the leading digital music companies such as Apple, Google and Spotify in negotiations with the independent sector and often determines the levels of remuneration paid by these companies to music right holders.
To emphasise this point the report also makes clear that digital music, and streaming in particular, has created increased opportunities for independent labels and that in virtually every country, independent labels have significantly higher market share in streaming than they do in physical formats.
The report also found that averaging 19 years in operation, independent record labels have built sustainable businesses in the digital era. With an average roster of 40 artists each, they provide a crucial platform for artists that do not fit the major label ‘mainstream model’ yet have built broad audiences beyond ‘DIY’ platforms, locally and internationally.
This diversity on both a national and international level is hugely valuable to the cultural life of countries all over the world, giving a platform to artists that otherwise might not have the opportunity to reach a wider audience. Independent labels are the bridge between indigenous cultural content and global markets, whilst still maintaining the integrity and authenticity of differing traditions.
Alison Wenham, CEO of WIN said, “This is an important report, giving us the first truly global overview of the economic and cultural value of independent music. With a 37.6% market share based on rights ownership, and a contribution of $5.6bn it is clear that the independent music community is playing an increasingly important part within the global music industry. Quite apart from the significance of the independent sector’s real market share, the vital contribution to the creation of local music in countries around the world assures that the cultural value and contribution of music is in very good hands with the independent sector.”
WINTEL is available online at www.winformusic.org