The 4 ‘main’ recorded music firms – which on this occasion means Common Music, Sony Music, and Warner Music, plus indie collective Merlin – have cumulatively misplaced 12% of market share on Spotify over the previous 5 years.

That stat got here to gentle in Spotify’s new annual investor report, which reveals that 75% of performs of music tracks on its platform final yr had been distributed by the ‘huge three’ majors or a Merlin member.

Clearly, that implies that 1 / 4 of music streams on Spotify final yr (25%) had been distributed by firms who had been unaffiliated with the majors or Merlin.

Mentioned firms embody the likes of TuneCore (and its mum or dad, Imagine), plus UnitedMasters, and sure different distribution platforms for unbiased (or ‘self-releasing’) artists.

(Vital observe of context: Merlin represents famed indie labels resembling Beggars Group, Cinq Music Group, [PIAS], Mushroom and others, however it additionally represents indie distributors – together with DistroKid. Merlin claims to signify someplace round 15% of the worldwide music market.)

The most important-plus-Merlin market share of all streams on Spotify was as excessive as 87% in 2017, based on earlier Spotify fiscal reviews. You may see the gradual decline of this determine since then beneath.

The dilution of main report firm market share on Spotify has develop into one thing of an annual inevitability, when you think about the large quantity of releases now hitting streaming companies every day (and the truth that the majors can solely launch a sure share of it).

Current estimates counsel that over 100,000 new tracks at the moment are deliver uploaded to streaming companies like Spotify each 24 hours.

The decline in market share of quantity of performs for the majors has a concurrent influence on their share of income earned from the service – because of the dominant ‘pro-rata’ mannequin of royalty payouts adopted by Spotify and others.

The majors are actually not unaware of this development, and are eager to change its persevering with influence on their companies.

Final yr, Rob Stringer, Chairman of Sony Music Group, spoke plainly in regards to the topic to his firm’s buyers. He famous that Sony Music’s general distribution market share (and by affiliation, the market share of all majors) was being “diluted by default” from “the sheer quantity of tracks” being launched every day through DIY distribution firms.

Stringer mentioned Sony‘s technique to slow-down this development of diluation. He stated Sony was intentionally “casting our nets deeper” in a bid to stem the market share shift to unbiased distribution – i.e. bringing a bigger quantity of unbiased music into’s Sony’s system through indie-facing operations like The Orchard and AWAL.

Stringer memorably spoke of his distate for “flotsam and jetsam” consuming up market share on streaming companies – a transparent reference to low-quality “practical” music and 31-second tracks designed to sport the pro-rata royalty mannequin on Spotify and different companies.

Stringer isn’t alone in that distate.

Final month, Sir Lucian Grainge, CEO and Chairman of Common Music Group, introduced to his world workers that Common had concluded that the present royalty mannequin on companies like Spotify was not offering equitable worth to premium-level artists.

Grainge made it clear that UMG was making the transfer to new royalty fashions on companies like Spotify a matter of world precedence.

He famous that UMG strongly objected to streaming companies pushing clients in the direction of “lower-quality practical content material” which, he stated, “in some instances can barely move for ‘music’”.

Grainge specfically castigated playlists on streaming companies which can be full of 31-second tracks of ‘practical music’ (i.e. music to calm down/sleep/unwind/focus to) whose brevity is intentionally designed to set off a streaming royalty fee as many occasions in a row as attainable.

“This yr, [UMG] shall be engaged on the innovation that’s completely important to advertise a more healthy, extra aggressive music ecosystem, one by which nice music, irrespective of the place it’s from, is definitely and clearly accessible for followers to find and luxuriate in,” he wrote.Music Enterprise Worldwide