May 8, 2012 at 1:26 pm

Report Shows Big Increase in Spotify’s Payouts to Indie Labels (Updated)

A confidential report forwarded to Evolver.fm indicates that independent labels saw a major boost in revenue from the Spotify unlimited music subscription service in the first quarter of 2012.

Merlin calls itself “the virtual fifth major label” for the way it represents many of the world’s leading independent record labels. It’s one of the “good guys,” as I noticed when it stood up first to MySpace and then to Apple iCloud to try to attempt to extract for indies the same treatment afforded the majors.

Basically, if you’re talking about independent music in the traditional sense — as in not coming from a major label (as opposed to the musical style known as “indie,” which can come from anywhere) — you’re probably talking about Merlin. Its members include Rough Trade, Warp Records, Epitaph, Naïve, Domino, Tommy Boy, One Little Indian, Yep Roc/Red Eye, Kontor New Media, Naxos, XL Recordings, Beggars Group, Merge, Sub Pop, The Mushroom Group, !K7, [PIAS], Domino, Koch/E1, and thousands more.

In the report sent to its members, Merlin touted strong revenue growth from Spotify. The consistent nature of these increases indicates that overall Spotify subscriber and usage growth is also responsible — and that is a good sign not only for the indies but for major labels too, not to mention Spotify and the industry at large.

As much as some artists complain about low payouts from Spotify — whose co-founder says is still in its early days – things appear to be moving in the right direction where independent labels are concerned.

  • Taylor

    how much growth? we want numbers!

  • http://twitter.com/DMFreeman Doug Freeman

    Merlin is also one of the labels with equity in Spotify (http://www.guardian.co.uk/music/musicblog/2009/aug/17/major-labels-spotify). Just saying, that they have an interest in promoting streaming, making it seem that it is paying off well for artists, and, as you note, setting themselves up on the same level and with the same leverage as the majors.

  • Anonymous

    Merlin is not a label, they are a trade organization and I believe their equity is on the behalf of the label members

  • http://twitter.com/gmortReport Gregory Mortenson

    Give us some concrete numbers please!

  • Dekay71

    spotify is legal piracy,the payout rates are so low,it hurts the labels and songwriters,all streaming services are hurting publishing revenues

  • Some Guy

    They will never be able to reach a streaming rate that balances out the damage they are doing to listeners’ perceived value, which they are decimating. 

  • Elliott Randall

     By “I believe their equity is on the behalf of the label members”, I take it you mean the labels and not their artists? If so, this makes them as jive as the RIAA.

  • Friedman’s Ghost

    Explain?  Now does streaming damange listeners’ perceived value???

  • Friedman’s Ghost

    Dinosaur thinking…

  • Rockero

    Suggestion please??

  • Jadenguy

    Domino twice? Franz Ferdinand is good, but not that good.

  • Steve J

    As someone who runs a small DIY label I can confirm no difference in our revenue from Spotify. This might be good news for the big indies but I wouldn’t say all none-major labels are getting the same treatment as those in Merlin’s “club”.

  • http://twitter.com/gavincastleton Gavin Castleton

    Every article in defense of Spotify makes a point of saying that its horrible royalty rate is due to its early stages of adoption. While I’m sure that this is so, no one has ever addressed this rampant exploitative notion that artists should be expected to take on the majority of the risk (via a massive paycut) for this startup company with absolutely no equity awarded them (the equity given to major labels and Merlin in the licensing negotiations—none of which is passed on to their artists—is irrelevant to artists). In every business model for just about every startup, those who take on the risk, i.e. investors, do so in exchange for equity in the company – equity that should one day be worth MORE than their original investment. Spotify wants the artist to make the sacrifices of an investor without any of the rewards due an investor. This is why Spotify is just one more company building its own wealth on the backs of artists, instead of hand-in-hand with them, as they, and this article, like to suggest.