MERLIN Survey - Independent Artists’ Chart Success Underlines Changed Digital Music Landscape

(Adele, Arcade Fire, Vampire Weekend, et al lead the charge)

• 22 artists represented by Merlin members score number 1s in at least one major territory – more than 50 Merlin member artists bag top 5 albums in 2010/2011
• US Albums market share for independents is 57% greater for digital than physical sales
• Paid tier usage of Merlin repertoire on streaming services outstrips free tier use by 20%

“Services that are serious about providing their customers a compelling product … would do well to take the time to understand the new dynamic for indies in the digital market." –Charles CaldasMay 20^th 2011, London:- Global rights agency Merlin has announced the results of a member survey showing a bumper crop of mainstream chart success for its members worldwide.The survey reflects a year which saw #1 US chart success and a Best Album Grammy win for Arcade Fire, Adele’s record breaking UK run and worldwide success, and chart topping performances by independent artists in Australia, Belgium, Canada, France, and Norway.Chart successesIn the period from January 2010 to March 2011, over 50 albums released on Merlin member labels reached top 5 chart positions (18 of those at #1) in charts1 across the world including in the USA, France, Germany, the UK, Canada, Australia, Norway, Spain, and Belgium. In all, more than 65 independent artists, including Adele, Arcade Fire, The National, Spoon, The Strokes, Social Distortion, and Vampire Weekend reached the top 5 in national album and single charts across the territories surveyed.These figures shatter the myth that the independent sector represents “long-tail”, specialist repertoire that is somehow of inferior value in the market.Digital market shareNielsen statistics for both 2009 and 2010² reveal that the US album market share for independents is 57% greater for digital as compared to physical sales - underlining the fact that in a market with limitless shelf space and freedom of choice, and free of the tightly controlled store fronts of physical retail, mainstream music consumers are increasingly discovering and purchasing independent music. Merlin is seeing usage shares for its members’ repertoire on licensed streaming and subscription services at levels that reflect, at least, those reported in the Nielsen report.Over-indexing on premium streamsFurthermore, on streaming and subscription services, Merlin members’ usage shares are significantly higher on paid for tiers than on free or ad-funded tiers. Specifically, in Q1 2011, Merlin members’ tracks were streamed over 750 million times across Rdio, Spotify, MySpace Music, Simfy, Eircom, and (all services with which Merlin has concluded deals). Merlin members’ combined share of streams on free/limited tiers on these services was 10.5% of all streams. However, moving to premium tiers, Merlin’s share rose from 10.5% to 12.25% - higher by 17% than on free/limited tiers. In some territories, the increase seen in Merlin member usage from free to premium tiers was as high as 27%. This illustrates that users who pay for subscription services – serious music fans by definition – are even more likely to be found listening to independent music.Said Charles Caldas, CEO of Merlin, “This survey once again highlights the value of Merlin members’ repertoire. The chart success of our members in these major markets underlines the fact that independent repertoire is absolutely as valuable to consumers as that of our major label competitors. Our data clearly indicates that consumers demonstrate higher levels of demand for this repertoire on digital services than in the physical world and higher levels of demand on paid for-tiers than on free. More than ever, these facts emphasize the vital importance of this repertoire to any service with serious ambitions in the digital realm."Services that are serious about providing their customers a compelling product that encourages them to pay, and stick around, would do well to take the time to understand the new dynamic for indies in the digital market, and analyze carefully what their customers are demanding."Notes for editors¹ Merlin member official chart number 1s – Highlights:

• USA – Arcade Fire (also Canada), Vampire Weekend
• Germany – Martin Solveig & Dragonette, Die Atzen Frauenarzt & Manny Marc
• UK – Adele (Also USA, 15 other countries)
• Australia – Bliss N Eso
• Norway – Stella Mwangi, Kalzers Orchestra, Bjørn Eidsvåg, Vamp, Motorpsycho, John Olav Nilsen & Gjengen, Gitarkameratene
• Spain – Alexandra Stan, Yolanda Be Cool, Elena, Edward Maya
• Belgium – Regi, Tom Dice, Tim Berg

² The Nielsen Company & Billboard’s 2010 Music Industry Report, published on Jan 6 2011 About MerlinMerlin, the virtual fifth major, represents the world's most important set of independent music rights. Merlin seeks to ensure its members have effective access to new and emerging revenue streams and that their rights are appropriately valued and protected.Merlin offers the most efficient means for digital music services to license repertoire from the largest and most compelling basket of independent rights in the world.Since commencing operations in May 2008, Merlin has struck deals with digital services including Spotify, Rdio, Zvooq, MySpace Music, Grooveshark, Simfy, Audiotube, Catch Media, Muzu TV, iMesh and Eircom. Merlin has also achieved settlements for its members with Grooveshark and XM Satellite radio.Members include Rough Trade, Warp Records, Epitaph, Naïve, Tommy Boy, One Little Indian, Yep Roc/Red Eye, Kontor New Media, Naxos, XL Recordings, Beggars Group, Merge, The Mushroom Group, !K7, PIAS, Domino and Koch/E1.Their artists include Adele, Vampire Weekend, Arcade Fire, The XX, Neko Case, The National, Tom Waits, Spoon, Grizzly Bear, DJ Khaled, Dorrough, Martin Solveig & Dragonette, Tiësto, Scooter and many, many more.Merlin is not an aggregator. Its members may opt in or out of any deal that it brokers and it is a non-profit organisation, with all dividends from its commercial investments being shared among its members.A global organisation, Merlin’s member labels released 72% of the top 60 independent albums issued 2008–2010, and commanded an 11% digital UK market share in 2009. Most recently, streaming service Spotify publicly announced that Merlin's repertoire represented over 10% of the usage on its service.