Licensing organisation Merlin recently signed a series of big digital deals for its members in the independent sector, including partnerships with Lickd, Twitch and Boomplay.
It’s more than two-and-a-half years since the appointment of Facebook exec Jeremy Sirota as CEO of Merlin. Here, he talks regional streaming services, social music and the metaverse...
What have been the key challenges since your appointment in 2020?
"We've grown from 22 to 42 people, so that's been a really interesting challenge, and that just simply comes from growth in deals and in members. The second is that we've expanded our membership in a lot of new areas and in countries that we've never had direct members. We have 140-plus new members since I've started, in 14 or 15 new countries. We're unique in the sense that our membership is comprised not just of labels, but also distributors, artist management companies, all different types of rights-holders. What we have found is the mission of Merlin is unbelievably elastic. There is no area, there is no business model, there's no genre, there is no culture where the Merlin mission does not apply.”
Was that a deliberate part of your strategy to open up beyond traditional labels?
“It's something I built on. We've expanded the team and service offering around the core of what we do, and we’re making it more accessible. I like to call it ‘demystifying Merlin’, and what we've seen is an explosive growth in the number of people applying to be members. We are the ultimate WYSIWYG – what you see is what you get. We have one membership agreement, one rate, so that makes my job incredibly helpful because I'm not negotiating with hundreds of members or clients around the world. But it does take a little bit of education to understand what that is, so the board play a really key role in helping us.”
Are there global hot spots for independents?
“Turkey and India are two great examples where independents are performing well. Because this global market presents opportunities for all types of genres, all types of artists, we're able to share this collective intelligence. Merlin members are leaning into top global platforms, but there are so many other regional and local platforms where they can lean in where it feels most natural for them, whether it's in China with our Tencent and NetEase deals, or Boomplay in Africa. We've recently signed deals with Flo [in Korea] and Trebel in Latin America, which is trying to focus on demographics that have not engaged with premium subscriptions. We’ve really expanded the scope of some of these country or regional partnerships. You have a grouping of core platforms representing a huge bulk of the global revenue. But there's all these other players out there, whether regionally or within the social music space, where we're seeing a lot of traction. Everyone's just finding that particular niche that works for them.”
I'm definitely looking to partner with the right metaverse or Web3 company
How significant are the new platform deals?
“For Merlin, we are definitely overperforming in the social music space, performing at a higher rate than we would see on even streaming services. One reason is that the way music is used [on those platforms] is fundamentally different to what we've seen in the past. And the second is that independents tend to be just more nimble, they adapt more quickly. So that means that they tend to be at the forefront of what's happening culturally in terms of breaking into new areas of music. I'm very bullish about Snap, I'm very excited about what's happening on Twitch and [YouTube] Shorts.”
Does the metaverse have potential for indies?
“The metaverse is what I would call being on the bleeding edge right now. And the good news is that independents are naturally on the bleeding edge. [But] while they can be more nimble they sometimes have fewer resources, so they have to make smarter, more strategic decisions. I've spent a lot of time talking to companies in this space. We keep a rolling list of everyone in the space as well. I'm definitely looking to partner with the right metaverse or Web3 company before the end of the year – that’s one of my personal goals. In the meantime, we have a lot of existing platforms and partners who are also exploring this [area], so we have a wealth of information.”
What’s your view on UK market growth?
“It is a more established market. Social is still growing, fitness is still growing. Where I see additional growth and opportunity in a market like the UK is in continuing to engage fans who are not premium subscribers. So there's still a lot of growth to happen. The premium subscriber growth curve is starting to slow down a little bit, but there's still lots of growth opportunities even within more established spaces.”
Finally, what’s your long-term assessment for the independent sector and the music market as a whole?
“It doesn’t take a crystal ball to predict that recorded music revenue and streaming will continue to grow. Social music will continue to grow. Fitness is emergent – not yet established, emergent – and that’s an exciting area. We’re only recently in our partnership with Twitch, and we’re on the cusp of hopefully bringing more adjacent verticals into the mix. These new formats, new types of music usage, are big for independent music. I feel that we have a unique opportunity to help educate the marketplace, and to create more opportunities to ensure that there is a viable future for independents, regardless of business, genre or country.”