This week In the Hot Seat with Larry LeBlanc: Jeremy Sirota, CEO, Merlin.
While Jeremy Sirota may be a traditional music man at heart, he has a digital heartbeat.
As a former Orange Country, California ‘90s coder kid, a 2000s Flash designer, a tech lawyer, and early member of the Facebook music team, tech has always been his parallel passion to music.
Recognizing Sirota’s expertise across digital, technology, and marketing, borders, as well as his precise understanding of label and artist needs, Merlin tapped him as the organization’s new CEO at the beginning of 2020.
Prior to Merlin, Sirota was an early hire on the Facebook Music Team as Independent Label BD Lead, working closely with independents around the world, and applying his operational knowledge to cross-functional efforts with the product, analytics, and operations teams.
Sirota previously held a number of senior positions at Warner Music Group, culminating in his appointment as senior VP, and Head of Business & Legal Affairs for both Warner-Elektra–Atlantic (WEA), Warner’s artist and label services division, and Alternative Distribution Alliance (ADA), Warner’s independent label services arm.
Prior to this, Sirota was an associate at the international law firm Morrison & Forster in New York, in its Technology Transactions Group.
Launched at MIDEM in 2007, Merlin was soon ratified by independent trade associations, as well as by leading independent labels, distributors, and aggregators from around the globe.
At the time, the independent sector was in danger of being marginalized, squeezed out of markets as major labels and publishers continued to merge. Independents, for example, were outraged with the initial MySpace Music offering in which only major record labels were granted ad-revenue sharing deals and equity stakes.
Merlin struck its first licensing deal in 2008 with the Sweden-based streaming service Spotify, which was among the first to realize that independent music repertoire would be incredibly important to their business.
With 36 employees, and a string of new executive appointments, as well as a new logo, and website, Merlin—most firmly under Sirota’s leadership–is on a tear, attracting 100 new members since he arrived, and forging more and more relationships in newly-developed international markets.
Sirota knows that the music industry lives in a highly visual attention economy and that it is at a determining point, as new ways of interacting and monetizing music are arising with unprecedented speed.
As technology continues to evolve and forges even more of a hold in the global marketplace, Sirota wants Merlin at the forefront.
Merlin now has premium deals with more than 30 digital music services around the world and is in conversations with dozens more. This includes Adaptr, Anghami, Apple, AWA, Boomplay, Deezer, Facebook/Instagram, iHeartRadio, Jaxsta, JioSaavn, JOOX, KKBox, Mixcloud, NetEase Cloud Music, Pandora, Peloton, Resso, ROXi, SberZvuk, Slacker, Snap, SoundCloud, Soundtrack Your Brand, Spotify, Tencent, TikTok, Triller, VEVO, Yandex, YouTube Music (including YouTube Shorts), and UMA.
Sirota holds a B.A. from the University of California, Berkeley, and a Juris Doctor from Hastings College of the Law in San Francisco.
I surmise that your hiring at Merlin was because of you being a respected and experienced executive in music and technology?
Yes, I think that and the combination of my experience with independents which doesn’t jump out at you. But I worked with ADA (Alternative Distribution Alliance) for several years at Warners. I also did independent music licensing at Facebook.
While at ADA you worked directly with its label partners, including Beggars Group, BMG, Dim Mak, Domino, Dualtone, Epitaph, Merge, Nettwerk, Partisan, Polyvinyl, Sub Pop, Tommy Boy, and Triple Crown.
At Facebook, you led the company’s efforts to license and acquire recorded music rights from independent labels and distributors around the world, thereby enabling innovative social music features across Facebook, Instagram, Oculus, and Messenger.
If you look at independents, my know-how in deals which is key to what Merlin does, and there is my experience across what Merlin does; whether that is technology or supply chain; all these kind of certified support services is also what I have done in my career. So where Merlin was headed, or where (music) ecosystems were headed, and what I’ve done, sort of aligned to make me a candidate that they chose.
Why did you take the Merlin CEO job?
Great question. I always thought that each job I’ve had, at that point in my life, has been the right job at that time. I was once asked what was my favorite job, and my answer has always been the job that I had at that time in my life. That is because each one built upon the other. I was a tech lawyer for 5 years (at Morrison & Foerster); I worked at Warner Music for 9 years; I was on the Facebook music team for two years, and now I am almost two years into the Merlin CEO role.
What appealed to you about Merlin?
Number one, just my deep and abiding passion for music. Second is my attraction to independents. There has always been a group of entrepreneurs there having diversity in terms of genres, artists, and experimentation. Finally, you pull all of those together, and Merlin fits at the crossroads of what has always pulled my career which is the intersection of music and technology. And, there was my ability to come into an organization like this that was foundationally strong, had a deep level of support from its members, a really strong team, and to build upon that foundation in an evolving ecosystem. Where I could take the knowledge that I had from each of those moments in my career; where I did so many deals in technology, and content at the law firm; 9 years at Warner, and seeing it through the lens of a major, but also working at ADA, and two years at the Facebook Music team building out music experiences. To be able to put all of those together on behalf of the independents at Merlin is a dream job, really.
I will add that by leading Merlin you have the chance to really move the needle in the independent music sphere. When you worked in a conglomerate like Warner or Facebook, no matter how good you were at your job, and no matter the deals you made, you were still just a cog in a machine. Whereas at Merlin, you can make an impressive footprint through communication with your members or increasing technology hookups, or pushing further into international markets.
That is absolutely right. My hope is that we can ensure that independents, especially in an evolving ecosystem, an evolving market with the challenges of COVID, that we can really serve them by a strong support network through all of these changes. I want Merlin to be that partner for independents, both in good times and bad times.
Where are you located?
I’m based in New York. We are still headquartered in London, and we have offices in New York and Tokyo. We have an employee based out of Europe, he’s our VP of Insight (Floris van Dam in Zwolle in The Netherlands). So we are building a global organization to support a global membership, and global partnerships.
How many labels, distributors, artist management firms, artist services companies, and other rights-holders are with Merlin?
We have hundreds of members. It is increasing all of the time, and because of the nature of our membership which includes labels, distributors, and other rightsholders which means collectively that we represent tens of thousands of labels, hundreds of thousands of artists, and millions of (music) tracks.
You’ve got to do better than “tens of thousands.” Are we talking about representing 20,000?
We have never counted, but it is more than 20,000, definitely.
What constitutes being an “independent” today given Sony Music’s acquisition of the indie giant AWAL for $430 million from Kobalt? So does it matter that AWAL is no longer 100% independent? As well, such big independent companies as BMG (distributed by ADA) and Because Music (distributed by Caroline International) work with majors. What constitutes being an independent?
The creative output is what I deem most important. It is actually the reason why I am so attracted to the music industry. It is one of the reasons why I am attracted to independents.
(The UK’s Competition and Markets Authority (CMA) has decided that Sony Music’s completed purchase of AWAL from Kobalt Music Group raises competition concerns, following a Phase 1 investigation into the buyout.
Sony must now address the CMA’s concerns within 5 working days. If it is unable to do so, the deal will be referred for an in-depth phase 2 investigation.
An industry source told Music Week: “Serious questions should be raised about why an independent body that is mandated to base its decisions on facts and evidence, has on this occasion stated publicly that they have been influenced by the DCMS Select Committee report published in June. The DCMS report should not have any bearing on what should be an independent and objective analysis by the CMA.”)
It probably depends on your definition of independence, and the experiences of the affiliated artists, and their management team. Is BMG a Merlin member?
I don’t want to reply to who may or who may not be part of Merlin. What I would say is that is that one, we have a membership criteria, and there is a membership agreement on who can and who can’t join Merlin. Clearly, the three majors could not join Merlin. And second, we have a Board that can advise and guide us and make decisions for Merlin. Third is that we need to ensure that Merlin is taking a holistic and adaptive view to a changing marketplace, and making sure that we can be supportive of different types of independents. We are unique in that we have members that are labels, distributors, artist management companies–hybrid entities—and then there are rights holders. Supporting that diversity is key to Merlin’s success in ensuring that a strong, and vibrant space continues.
With entertainment conglomerates continually trying to buy each other up, Merlin members must feel vulnerable. Vivendi initially sold 10% of Universal Music Group to a consortium led by China’s Tencent in 2020, before selling the same consortium an additional 10% this year. Vivendi is expected to list 60% of UMG on the Amsterdam stock exchange this coming September 21st. With Vivendi recently selling 10% to Pershing Square, and with this upcoming distribution of 60% of UMG’s shares via its Amsterdam listing, Vivendi will have sold some 90% of Universal in the past 18 months. Quite a disruption in the global marketplace.
I pay attention to everything happening in the music ecosystem, whether it is the majors, whether it’s our members, our digital partners, and even those who are what I call “music adjacent.” To stay educated, and abreast of what’s happening ensures that we can continue to evolve into an organization that continues to meet, and exceed the needs of our members. In that sense, we are also well supported by our Board. This is where our Board serves a key role. We operate like a not-for-profit, and our Board is nominated from our members, and then is voted into office by our members. We have guidance and support and oversight at our Board level from our members, and that provides a lot of insight into the marketplace, and what is happening.
is there still concern among your members of Universal and Tencent owning such a huge chunk of Spotify? In that they maintain barriers and make their own independent decisions?
Universal Music has held on to its Spotify 3.5% share worth approximately $2 billion; while In 2018, Spotify bought a 9% stake in Tencent as part of a share swap resulting in Tencent Music owning nearly 10% of Spotify.
Merlin, in contrast, was the first in 2018 to dispose of its 0.5% Spotify stake for a reported $135 million. The reason given was Merlin shouldn’t hold a long-term equity position in a public listed company.
Midia Research’s suggests that in 2020, the three major record companies shared 68.9% share of all plays on Spotify globally by volume, with Merlin members with 9.1%. Merlin labels/artists have traditionally had a higher representation of plays amongst premium subscribers than free users.
Three years ago, Spotify became a music distributor, allowing independent artists to upload music to its service direct, without the need for a third-party aggregator. Next, Spotify acquired a minority stake in Distrokid while opening up its distribution function so that artists could upload to all major streaming services via the Spotify platform. This, of course, led to Spotify’s launch of monetized subscription podcasts for independent creators on its platform in the U.S.
Any concern from your members if Universal and Tencent can maintain barriers between themselves, as well as with Spotify moving into the independent sphere so that they each making their own independent decisions?
I can’t speak to the concerns necessarily of all of our members, but I could say that the sale of Spotify stock was before I was CEO. That our members are better positioned to make decisions about their revenue. Merlin exists not to drive PnL (Profit and Loss), but to drive value and revenue to our members, and that they can make better decisions about that because ultimately it’s their money. The equity is theirs. That means they could have invested that back into Spotify or invested it with their artists. I wouldn’t categorize it as it would be worth X now. I would categorize it that we drove value back to them immediately.
In terms of companies owning stock in public companies, my understanding is that the majors own a very small minority share.
And Merlin’s relationship with Spotify?
The Merlin/Spotify relationship is extremely strong. We were the first to sign with them in 2008. So we have had a 13-year partnership, and we have an open conduit to them in terms of being able to take the needs of our membership and convey that to Spotify, as well as having direct access to Spotify to ensure that their needs, and what they need, are valued. I think that we have a good relationship with them. We have an open conduit for conversation, and I have not seen any evidence of that being affected by some kind of stock ownership in the company.
The continued strength of Spotify, Apple, Facebook/Instagram, YouTube Music, and others illustrates that such services are succeeding because they are offering their customers a full choice of music from both major labels, and independent sources.
Two decades ago, the independent music sector was in danger of being dismantled as a number of distributors and retailers went bust in the UK, Europe, and North America.
While the majors had long had a lock hold on the retail marketplace, increased concentration of ownership was hindering the Independent label community in terms of achieving economic parity and market access. The majors were then in a position to influence the commercial terms of doing business.
Nevertheless, Merlin and such music trade associations as AIM (Association of Independent Music), A2IM (American Association of Independent Music), WIN (Worldwide Independent Network), and IMPALA, successfully fought for the indies against the majors.
The fact that we have added 100 new members to Merlin since I started from such diverse parts of the globe, and that we are able to support their needs—all of them are coming at it from a different cultural perspective, a different type of business, different types of artists and genres—that, to me, speaks to an organization that is adaptive and resilient, and that will continue to provide newer value as we go into the future. I think that Merlin is more essential than ever in ensuring that the music ecosystem is diverse.
The strength of distributor alliances of the past was that labels and rightsholders talked among themselves and often helped each other. Merlin provides oversight and guidance to its members in order for them to expand their own roles in the digital ecosystem, but does Merlin encourage cooperation between the members themselves?
That’s not what we do. We are constructed to ensure that we are in compliance of anti-trust, and anti-competition laws. The education and support that we provide is from Merlin direct to our members, Not necessarily trying to bring our members together to co-operate, and work with each other. To an extent that is happening with the trade associations. That is the role of organizations like A2IM, AIM, IMPALA, WIN, and the other trade associations around the world.
Merlin operates in a way that you choose your level of participation. You choose the deals. If you want to participate, you choose the levels of support that you want from us. We are here as a bridge, as a conduit into the digital partnership. You access them directly, and you look to Merlin for support. If you use us or you don’t, that is also great. We don’t need to support you if you don’t need the help. I think that independents have a similar philosophy how they can operate also; whether it’s distributors to labels or labels to their artists. They can offer as much as is needed, and they can create space for artists who, maybe, want to do things directly.
A significant part of Merlin’s membership are DIY artists uploading their music via the likes of TuneCore, DistroKid and SoundCloud.
According to Midia Research, DIY saw a 34.1% growth in annual revenues in 2020 and generated $1.2 billion globally, the first time this sector has collectively broken the billion-dollar annual milestone.
Last year, TuneCore, owned by Paris-headquartered Believe since 2015,
collected, and then paid out to indie artists approximately $412 million in royalties and other related income. TuneCore distributes 100% of the royalty money it collects to artists; its bottom line is reliant on subscriptions paid by its members, which amounted to $37 million in consolidated revenues last year.
DIY platforms are obviously part of the fabric of the tapestry of the music ecosystem today.
The independent sector is thriving. That doesn’t mean that there aren’t challenges but there are a lot of opportunities out there. Merlin can provide value in those spaces for our members but still ensure that they are the ones at the forefront. The reason why we talk about our company being member-led and music-focused is that everything that we do is on behalf of our members. It is baked into the DNA, and even how we are constructed. It is why we operate like a not-for-profit, and why our Board of directors is drawn from our membership. It ensures that we treat all of our members on the same basis regardless of size or location.
Equal opportunity for all.
One of the foremost areas of support that we provide to our members behind the scenes is education. If you are a small label or working from a single country or if you are a distributor, and you only have 10 employees, you don’t always know what is happening around the world. You can’t always substantiate what you believe is right about the marketplace. What Merlin can do for our members is to educate, to substantiate, and to ensure that they have the most accurate information about the digital ecosystem, especially as it is evolving.
So a key role for Merlin is communication with its members?
Absolutely. I would say that communication is key to what Merlin does and that’s whether through transparency around our deals or educating about digital partners providing advice and support. The key to Merlin is being responsive and attentive to our members’ needs.
Everyone at Merlin is here because we love music. Being part of a company like Merlin that has the machine we do gives a lot of value to the role that we play in the music ecosystem for our members.
Watching a YouTube video clip of yourself while at Warner Music with LyricFind’s Darryl Ballantyne, Walden Venture Capital’s Larry Marcus, and Time magazine’s Matt Vella at Collision 2017, talking about the music and technology landscape then, is like watching a video clip before satellite communication.
Our music universe has so changed in just those four years…
Even then, the majors and independents, as well as DYI artists, operated in vastly different worlds. Today, with evolving technology and global internet access, each is looking over the shoulder of the other. It’s truly amazing what the smallest independent or DYI-driven artist can do today on their own.
The level of assets is unprecedented. This is where Merlin will continue to provide that key component for independents as the independent space continues to grow. We are seeing that happen. We are seeing independents over-indexing in the new platforms, and these new spaces. Merlin can be that partner for them, and provide a service to new services while quantitatively ensuring that we are delivering the best in class deals. That, to me, is a winning equation for how Merlin can support independents, and ensure that they can be independent. So they can continue to have this diverse ecosystem.
At first, digital was primarily being used for low-budget background content. It quickly gathered traction with increasing distribution across connected ad-driven platforms such as Facebook, YouTube, and others.
But streaming growth of music is presently stalling.
Media and technology analyst Mark Mulligan recently asked, “What is the future business model for music, and where does revenue growth come from?” He predicts that, “The biggest music industry opportunity is not licensing music. It is monetizing fandom.”
As you know Facebook just got into social music by rolling out a new option to share clips of music videos to its Stories. What with Instagram launching Reels, Snap’s recent licensing deals, and hyper-social TikTok rocketing of influencers to stardom overnight, Facebook’s move into fan-targeted music videos isn’t all that surprising.
Without giving away privacy issues, was a video rollout in development when you worked at Facebook?
Thanks for loading the confidentiality that I operate under both as a lawyer and as a former employee of a law firm, and a major (label) and Facebook. I appreciate you starting with that perspective.
I was the fifth employee hired under the music team (at Facebook), and it was very exciting to be there at an early stage before a single product or feature had been launched. Then in the two years that I was there, we launched UGC (the User Generated Content Platform), Music Stickers on Instagram Stories, Music in Profiles on Facebook, and other music features and products. It was really exciting to be part of that and to work with product managers and engineers, and data scientists to help support those endeavors. Yes, I was part of the thinking about music videos and working with some of those product managers who were helping to integrate on those features.
At Merlin, we are obviously very excited to participate in (Facebook’s) music videos which are now live in the United States and Mexico.
Facebook was one of the first social platforms to recognize video as a core component of its offering. When they launched live video in beta, and made it more of a priority in 2016, that is when live streaming really caught fire. Facebook recognized the potential of video and music quite early on.
They did. If you step back, music is central to life. It is one of the core ways to communicate. It is one of the core ways that we synthesize the world around us, and if you translate that into digital platforms then clearly those two elements are going to apply just as equally to digital platforms. And the only question to ask then is in what ways do you incorporate it into your platform? Because each platform is slightly different. On the surface, they can seem very similar, but the demographic, the country, the type of people that use them, and how they use them (videos) differs. We want to be out in front communicating what we are seeing, and what our members are saying to platforms in the space so they can make better decisions about music. and to those who aren’t in the space, to encourage them about how they could use music, and bring music into their ecosystem.
The rise of digital entertainment distribution presented new opportunities to independents while placing new demands on Merlin resulting in a transformation within the organization. Though the core principles remain in place.
If you look back to when were founded, the vast majority of those members are still participating members. The fact that we can continue to support members that have been with us for so long, and they support new members from different regions, and different backgrounds is a good signal for the future. And that we can continue to grow our deal stack. As you know. we now have a (new, expanded commercial relationship) deal with Apple to provide access to that platform. And we have deals with Adaptr and Jook, and we have more coming. We want to continue to grow our deals in a strategic manner, so as the ecosystem evolves, the digital services, the nature of what independents are evolves, and the complexity evolves. We are forward thinking in how we are building an organization to support that so independents can have a future and can continue to compete at the highest levels.
Any specific new deals on the horizon?
Merlin is always in conversations with dozens of potential partners, and we’re close to finalizing 4 or 5 more deals in the next two months.
With each turn of the technology wheel, with each great transformation in technology, independent music has been at the forefront, and Merlin is the quintessential early adopter of new digital opportunities and, as a result, its members’ repertoire consistently over-indexes in social music.
There’s no question that music independents and tech are natural partners.
And I see Merlin as serving a key role in facilitating those rights and translating those rights to digital services while ensuring proper valuation for those rights. It is one of the reasons why Merlin on behalf of its members is trying to be at the forefront of new opportunities. We were proud last year to be the first sound recording partner to sign with Snap. We recently announced our deal with (the music integration platform) Adaptr. For those who don’t know what Adaptr is, it is what we call in the industry the “sandbox” licensing platform, for it provides startups the opportunity to license music without the challenges that it can be presented to start-ups; so more platforms and services can access music and build those experiences into their platforms.
(B2B platform Adaptr is a plug-and-play licensing service that enables developers to integrate licensed music into their apps. The service was launched in January (2021) by the American technology company Feed Media Group. It works with small-to-medium-sized startups that have raised no more than $7.5 million, and earned less than $4.5 million in revenue).
The deal with Adaptr considerably expands Merlin members’ reach by allowing record labels, distributors, and other rights holders within Merlin’s network to make their music available via Adaptr.
Adatpr ensures that start-ups have easy access to properly licensed music at the earliest stages of their development and that Merlin members will receive proper licensing fees in return.
Unlike films, in which distributors or film companies generally own all of the rights, music has numerous rights holders including labels and publishers. That’s been a huge problem for anybody building a music service because tracking some of those rightsholders down can be difficult, and expensive. The licensing regime has been simplified, if only because everybody has seen that there is a new music business and, as technology has driven new music uses, there’s been greater communication from rights holders to work in partnership with developers to integrate their music within their services.
There are now standard practices that weren’t there previously. Among other things, reducing frictions around licensing, will enable us to accelerate innovation, support the start-up community, engender competition, excite our fans with new and evolving ways to interact with music, and deliver additional value for our artists and songwriters.
With Adaptr, developers get the commercial music they want without needing to jump through the complex hoops of music licensing, distribution, and payments.
And those are the areas where Merlin can really help drive value in both directions on behalf of our members but also on behalf of the digital services. I have seen it first hand having worked at Facebook the challenges of supporting so many direct partnerships, especially at a nascent stage, and we can be that vehicle for digital services while ensuring the best-in-class deals for our members as that conduit for them.
Unquestionably, the internet led to Merlin being positioned increasingly internationally. That speaks not just to the depth, and popularity of independent music, but to the expanse of distribution available today through digital sources. Two decades ago, the international distribution of independent music, resulting in use abroad, was a protracted process with unpredictable results, including capturing revenue streams.
Merlin’s deal with Joox, the music streaming service owned by Tencent, followed an earlier deal with China-based music streaming service NetEase Cloud Music, and the renewal of Merlin’s multi-year licensing deal with NetEase’s rival Tencent Music Entertainment in late 2020.
The Joox agreement licenses Merlin content via Joox’s ad-supported and premium tiers, as well as its karaoke feature and library. The deal gives Merlin members access to new audiences in Asia, including Hong Kong, Indonesia, Macau, Malaysia, Myanmar, and Thailand, as well as South Africa, their first non-Asian market.
Joox was a pivotal deal.
Joox is quite strong in South East Asia. This is another example of particular value for our members for services; whether also in China with our deal with NetEase Cloud Music, Tencent Music Entertainment; or in Russia, where we now have three deals with Yandex Music, UMA (vKontakte (VK) and SberZvuk; or Boomplay in Africa.
Merlin has a large number of deals with services in territories where it can be challenging for members to strike deals, challenging to manage those relationships, whether because of language barriers. There are all sorts of challenges around exchange rates, and currencies, and getting money out of those countries, and reporting. This is where Merlin can provide a particular value for our members.
China’s music market is almost entirely digital. There are about 900 million mobile internet users there, and around 630 million mobile digital music consumers who can buy music on their phones.
After being hit with an exclusivity ban by China’s State Administration of Market Regulation in July, Tencent Holdings published a post on WeChat on August 31st announcing that it had officially written to all “upstream copyright” holders to end their exclusive agreements on its majority-owned music arm, Tencent Music Entertainment
Is Merlin impacted by this?
I’m not aware of any impact.
Many in the music community contend that Africa may become a significant music market, but one of the obstacles facing streaming services is that only 29% of people on the continent use the internet.
Still, according to the website WeTracker, there are currently more than 25 streaming platforms operating in Africa. This includes Boomplay, which has about 50 million users, and smaller providers, including Mkito in Tanzania, Songa in Kenya, and uduX in Nigeria.
Surely, there are opportunities in Africa for many Merlin members once copyright safeguards are in place across the continent.
The more that Merlin can help to show the value of copyright in sound recordings, the more that we can strike deals with services around the world, the more that it creates the effort here to protect those rights. We recently had a member join from Kenya, and everybody’s story is different in Africa. With this particular member, they got their start on YouTube. They were able to upload videos without some of the challenges presented by rights regimes. One of the values they are about to get from Merlin is that they have never had a deal with Spotify. They have never had their content live on Apple. Providing that level of assets for this member is really going to be instrumental in helping them grow their business.
As Merlin has expanded its international reach, strategically increased its membership, and added new digital services, it has seen growth in membership coming from all around the world, including the Middle East, Africa, Eastern Europe, and Latin America.
We have members from virtually every country in the world, yet there are still places where we are just now present like Kenya. Our first time members over the last year have also come from Peru, Slovakia, and the United Arab Emirates
Also, Merlin now has first-time members from Burkina Faso in West Africa., and Singapore.
For us, it’s exciting to support members from places where, maybe, they haven’t traditionally had the support that they needed to protect their copyrights and to get their content out there licensed. We are happy to support anybody who is listening to ensure that they can be independent, and drive value to their businesses, and to their artists. I wouldn’t say that we directly help to build or support rights regimes, but I would think that indirectly we are helping to achieve that just by showing the value of copyright and helping to support members from countries from all around the world.
With the international growth of membership and the additional new digital services available, has Merlin grown to better support that growth?
That’s right. We have more deals than we have ever had in our history. The complexity of the deals is more. The operational requirements are more and the value that we want to drive to our members is higher. We’ve set a higher bar for ourselves. And that has translated into growing our deal tam. We’ve grown our analytics team. We have (in June 2019) hired a VP of Insights, Floris van Dam (the former International Head of Research & Analysis for Warner Music Group). We have grown our commercial partnerships team which serves as a conduit to help our members get more value out of their partnerships. We have more support in our finance, and reporting teams, and we’ve grown our technology.)
Why the emphasis on technology?
Because technology is such a core component to be an adaptive organization.
We also have to recognize that specific music genres work with certain platforms. I’m thinking of hip-hop, gaming and interactive digital experiences. Fortnite has created exceptional live streaming concerts in the gaming universe in the past, with Travis Scott and Marshmello. Ariana Grande’s live concert last year only hinted at how far Epic Games can go with creating an innovative music experience in the games universe. Meanwhile, the virtual/digital world is driven by hip-hop.
You can equally say that electronic music is driving it as well. I think that goes back to what I was saying that each platform and each experience will be slightly different. You can also think of about the world of fitness where you would immediately think of high energy, high impact, high BPM music, and actually there’s a lot more diversity happening there as well. There’s all sorts of Chill Down music. There’s all kinds of take it down a notch (music). There’s all kinds of ramping up music too. So with a lot of these platforms, they might have an entry point, and that can be hip-hop or electronic or another genre, but once you open that keyhole, what you will find is that they encompass and incorporate probably almost all genres.
Interactive digital experiences offer opportunities for artists to create their own digital universe and bring their fans right into their own mindset. Another great opportunity for independent artists.
Absolutely, and this actually speaks to one of the key ways that independents can continue to rise in the future as we see with the continued evolution into social and messaging and fitness and gaming, AR, VR, perhaps metaverse (a collective virtual shared space, created by the convergence of virtually enhanced physical reality and physically persistent virtual space). We see Merlin members overperforming in social music, and we see part of it is simply that independents to be more nimble can adapt more quickly. There’s less bureaucracy and gatekeepers accessing these different ecosystems.
There’s no lack of opportunities in the space, and that is both an advantage or a benefit, right?
It is something that is exciting and it can be a little bit overwhelming as well to make decisions about where to lean in, and where you should take advantage. Obviously, one of the reasons why we are adding resources in our analytics and insight teams is to help our members to make those decisions about what ecosystem might be most advantageous for them to lean into more; where there are opportunities that they might be able to take advantage of; and how do we better support them as this ecosystem gets more complex and more diverse.
Still a major like Warner can move mountains in the space.
You are speaking to two worlds, right? As I often say, “It’s easier for a school of fish to turn than a whale.”
independents are more nimble, and can adapt faster because they are not as burdened by large organizations or layers of bureaucracy. That is where the innovation and the embedment come in. I also think one of the things that you are speaking to is how many opportunities you can offer to artists. I think that this is again a real strength of independents, and it is similar to how Merlin operates.
At the same time, the majors benefit from many of the inroads made by the independents in the digital space too.
You are speaking to the fact that it is a small industry.
Larry LeBlanc is widely recognized as one of the leading music industry journalists in the world. Before joining CelebrityAccess in 2008 as senior editor, he was the Canadian bureau chief of Billboard from 1991-2007 and Canadian editor of Record World from 1970-80. He was also a co-founder of the late Canadian music trade, The Record.
He has been quoted on music industry issues in hundreds of publications including Time, Forbes, and the London Times. He is a co-author of the book “Music From Far And Wide,” and a Lifetime Member of the Songwriters Hall of Fame.
He is the recipient of the 2013 Walt Grealis Special Achievement Award, recognizing individuals who have made an impact on the Canadian music industry.