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Apple Music and Spotify help indie labels double their market share

There’s been much criticism of streaming services like Apple Music and Spotify for paying relatively small sums to artists, but a new report today suggests there’s some good news in the mix.

Independent labels now represent 40% of the music market, twice the share they had back in the days of physical music sales, and they have never been more optimistic about the future …

CNET reports that playlists surfacing lesser-known artists has been key.

By nudging people to listen to a wider variety of artists, the services are helping more listeners stumble on music outside the mainstream […]

“The Kool-Aid of the majors is over,” Allen Kovac, CEO of independent rock label Eleven Seven, said in an interview. He referenced a Worldwide Independent Network report: that indies represent 40% of the market, double their level two decades ago. “That tells you everything” […]

Streaming’s format — making virtually all the world’s music available to hear and personalizing it to what you like — works in favor of independent labels and musicians, said Brian Whitman, CEO of recommendation machine-learning startup Canopy who was one of Spotify’s personalization scientists for nearly three years.

“People’s diversity of listening trends upwards the more discovery features you send at them,” he said. “Even if not every single listener wanted to hear indie music, they’re more likely to be exposed to it.”

That’s resulted in the most upbeat feeling ever seen in the indie sector.

The “optimism index” at indies hit its highest level this year, according to this month’s annual membership survey by Merlin, a group representing more than 2,000 independent labels and music companies. Eighty-five percent of its members were optimistic about the future of their businesses, coinciding with their digital income swelling thanks to streaming.

Playlists have dramatically changed the way we listen to music. Instead of playing an entire album, we’ll sample tracks from a much greater variety of artists, including ones who would never before have made it onto our radar. That’s true of both Apple Music and Spotify, the effect applying to human-curated playlists and algorithmic ones alike.

That means having a hit single or album is far less important than it used to be.

An analysis earlier this month by Rolling Stone found that the world’s biggest artists have seen their share of total streams drop significantly over the last three years. More than 98% of the growth in US music streaming last year came from tracks that never broke into the top 500.

Indeed, one distributor of independent music went as far as to say that streaming services have actually created a new indie sector.

“If there’s one thing that streaming has done for sure, it’s created a new independent music industry,” said Jorge Brea, founder and CEO of Symphonic Distribution, an independent music company in Tampa, Florida, that’s distributed music by Waka Flocka Flame and Deadmau5 in his early days.

Apple Music pays the highest sums to creators at $12-15 per 1,000 streams, while YouTube pays the lowest at just $1 or so. Payments are typically split between artists, songwriters, and labels. Bad metadata can, however, see some artists and songwriters missing out.

Eddy Cue recently revealed that Apple Music now has 60M paying subscribers, adding 10M of them in the last six months.

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Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!

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