Sony just became (even more of) an independent powerhouse

Sony Music has bought AWAL (and Kobalt Neighbouring Rights) from Kobalt for $430 million. By adding AWAL to its already-booming Orchard division (as well as other distribution companies), it now has leading brands for independent artists as well as independent labels. Sony Music just became one of, if not the, leading global companies for independent music. With a major now being one of the biggest indies, the obvious question is: what does being independent even mean anymore? 

Kobalt has been one of the music industry’s most important change agents with its publishing and label assets helping reframe some of the fundamentals of the business. Since its acquisition of AWAL, Kobalt has nurtured it into a brand that was synonymous with the age of the empowered independent artist and was seen by much of the independent artist community as their natural home. 

Now that AWAL is becoming assimilated into the Sony Music corporate structure, the independent artist community will be wondering whether Sony can keep AWAL’s independent spirit alive. The answer is most likely a qualified ‘yes’. Years after being fully incorporated into Sony, the Orchard continues to be a key force for independent labels. Sony has proven adept at striking a balance between corporate integration and divisional independence. Also, Kobalt had always structured AWAL in a way that more closely resembled a major label than it did an independent. This was reflected in its structure, leadership, strategic thinking, tech and marketing capabilities, and even in many of its more successful artists like Lauv and Rex Orange County (who Sony eventually poached). You could even make the case that what was really independent about AWAL was that it was not part of a major label…

Nevertheless there was, and is, a crucial, company-defining, independent principle: artist ownership of rights. This remains what makes the average AWAL artist different from the average Sony Music artist. But, of course, all of the majors have been betting big on label services too. Which brings us back to the original question: what does being independent actually mean? Is it about not being part of a big corporate structure? Does it mean an artist retaining ownership of their rights? Is it commercial and creative freedom for artists? Is it an ideology of music first, business second? In truth it is probably a mixture of some and all of those things, depending on the individual artist. What is however also true, is that nowadays an artist can be independent with a major label. A dynamic that AWAL just made even more true.

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