Global independent label survey

MIDiA Research is conducting a major study of independent label revenue in order to create a definitive review of the independent sector’s contribution to the global music market. MIDiA conducted this work for a number of years on behalf of the Worldwide Independent Network and is now independently creating a dataset for 2020. The last WINTel study can be found here. We are calling for all independent labels, of whatever size and geography, to complete our survey which can be found here.

Why this survey is so important

The most common method used to determine the global market share of independents is to take total recorded music revenues from MIDiA or the IFPI and then deduct the revenues of the major labels. This is how the independent sector has been measured for years. However, it under-represents the value of independents because many independent labels are either distributed directly via majors or via one of their wholly owned distribution arms such as the Orchard. This means that independent label revenue appears within major label revenue. Although MIDiA’s figure is higher than the IFPI’s to reflect the latter’s under-reporting of independents, the method still under-represents independents whichever total market figure is used.

The purpose of this survey is to pick up where WINTel left off, to separate out the revenue that is distributed by majors and allocate that directly to the independents, thus revealing the larger, actual independent market share based on ownership of copyright rather than by the company that distributes the revenue.

What is needed from independent labels

The survey asks a number of questions about each record label’s revenue, growth and the distributors it works with. We appreciate that this information is highly sensitive which is why we treat the data with utmost care and confidentiality, just as we did when we fielded the survey on behalf of WINTel.

As with all our previous surveys, all responses will be treated as strictly confidential. No individual responses will ever be shared. Instead, all responses will only ever be aggregated into national and international numbers. The respondent-level data will be stored securely, encrypted in an offline location and will never be shared with any third party whatsoever.

What is in it for independent labels

MIDiA will provide a full summary of the final, aggregated results to all independent labels and distributors that participate in this survey. The final data will present independent label market share data globally and at country level.

In addition, the survey asks respondents about issues such as how the global pandemic has affected their business and how confident they feel about 2021. We will also be providing this data to all respondents, enabling them to benchmark themselves against their peers.

Next steps

We are fielding this survey throughout December and the start of 2021. Once the survey fielding is complete MIDiA will build its market share model using the results of the survey and other inputs such as reported company financials and input from direct conversations with a number of larger independent labels.

As a reminder, at no stage will any label-level data be seen by anyone else other than the MIDiA analysts working on the project and they will not share any of this information with anyone else.

The survey can be found here: https://www.surveymonkey.co.uk/r/DCM3VXG

We look forward to your participation. No independent label is too big or small to take part. If you have any questions regarding this project then email info@midiaresearch.com

Creator tools: The music industry’s new top of funnel

For most of 2020, MIDiA has been working on a major piece of work around the fast-growing creator tools space. The themes we had already started working on became rocket propelled with the onset of the pandemic, with an unprecedented volume of artists starting to engage with music production tools, services and hardware. Even before COVID-19, the creator tools space was set to transform the entire music business; now that future has become the present. This landmark report ‘Creator Tools – The Music Industry’s New Top of Funnel’ is immediately available to MIDiA Research clients here (more details of the report can be found at the bottom of this post).

Music production used to be a siloed segment of the music industry that revolved around studios, hardware and packaged software – at best a cost centre for labels. Now that is all changing. A new wave of creator tools companies are meeting the needs of a new generation of artists with innovative and intuitive music production solutions. Adding to an already vibrant marketplace, this new breed of production tools and services, often subscription-based, are reinventing the creative process and will reshape the long-term view of what a music company is. 

This is set to be the most dramatic product strategy shift the music industry has experienced in decades catalysed by the COVID-19 pandemic. 68% of independent artists reported making more music and 36% doing more online collaborations during lockdowns.

There are 14.6 million digital music creators globally, of which 4.7 million are self-releasing ‘artists direct’, up 31% from 3.6 million in 2019.

The emergence of a subscription economy

In the same year, music software, sounds and services generated $884 million, with plugins and VSTs the largest single segment at 43%. Building on this ‘COVID bounce’ total revenues will reach $1.86 billion by 2027. Though music software is the most widely-adopted creator tools category among independent artists, sounds and services will be the two largest drivers of future growth. 

Subscriptions models will also be key, with new models, more self-sufficient tools and the rise of SAAS services making the market majority subscription by 2026, with subscription services reaching $870 million by 2027, up 477% from $151 million in 2019. The shift from software sales to SAAS models means these companies are collecting crucial creator data before they even get to the distribution or release stage, giving these companies the ability to identify the likely hits before they even get into streaming services. This is the music industry’s new top of funnel. Meanwhile at the other end of the funnel, Apple (Garage Band, Logic) and Spotify (SoundBetter, Soundtrap) are well placed to push up the funnel, with the foundations of what tomorrow’s record label will be. Sony Music’s move to invest in creation app Tully is the start of what will rapidly become a creator tools arms race. Expect Splice and LANDR to become sought after by both labels and streaming services. 

Creative feedback loops

The new breed of creator tools is also fostering creative feedback loops between other creators and in some cases with audiences—a dynamic MIDiA expects to become a mainstay of the future production landscape as digitally-native Gen Z and younger millennials mature in their production capabilities. The creator tools that build around such creative feedback loops will be those that resonate most with the young generation who will be the creators and fans of tomorrow’s music business. 

Snap’s acquisition of collaboration app Voisey illustrates how this is so much more than just a music tech play. We are on the cusp of a consumer revolution also. Just like TikTok made amateur video making a mainstream consumer activity as Instagram did photography, so this new generation of apps and games are aiming to do the same with music. Warner Music’s Tones and I making a soundpack available for fans to create music with inside Roblox’s Splash is an early indication of how music making is about to go mainstream.

Just as samplers and DAWs transformed music making, so this new approach to production will change the future of how music is made and in turn, how it sounds. Music production product strategy is at a pivot point, where a new breed of user experience-led propositions will rise to prominence. The smart services that have already empowered their users to go from zero to 100 more quickly than ever before, will grow their offerings in line with their user base’s growing capabilities. The business of music has always shaped the culture of music, but perhaps never more so than how the creator tools revolution will reshape the future of what it means to be a fan, an artist and a music company.

If you are not yet a MIDiA client and would like to learn more about how to get access to the ‘Creator Tools – The Music Industry’s New Top of Funnel’ then email stephen@midiaresearch.com

Report details

Pages: 48

Figures: 15

Words: 7,500

Vendor profiles: 12

Products tracked: c.2,000

Excel includes:

Music Software, Sounds and Services Revenue

Creator Tools Value Chain

Software Tracker Summary

Software Tracker – Plugins

Software Tracker – VSTs

Software Tracker DAWs

Software Tracker – Rent-to-own

Software Tracker – Platforms

Software Tracker – DJ Tools

Creator Tools Company Directory

Methodology Statement