The majority of indie labels now makes more money with digital downloads and music subscription services than with CDs, according to independent record label trade group Merlin, which counts more than 20,000 independent labels as its members. Some 55% of indie labels now make the majority of their money in digital, and a third of all indies generate 75% or more of their income with digital services, according to Merlin’s most recent member survey.
For many labels, digital income still is dominated by download sales, but subscription services like Spotify are getting increasingly important: A third of all labels now makes more than half of its digital revenue with subscription services. Last year, that was true for only 20% of all labels.
That shift from downloads to subscriptions is likely going to accelerate with the launch of Apple Music next week. Merlin initially refused to strike a deal with Apple because of the company’s plans not to pay labels for the use of their music during Apple Music’s free trial. However, after Apple changed course this week, Merlin agreed to join Apple Music.