SAMC interview with Jeremy Sirota

Tuesday October 3rd, 2023

Could you start by giving us a brief overview of Merlin and its role in the music landscape?

Thanks for inviting me to speak to your audience in The Balkans!

Merlin is the independent’s digital music licensing partner. We’ve negotiated superior commercial deals with Apple, Facebook, Spotify, TikTok, YouTube, and 40 other innovative platforms around the world. Our global membership represents 15% of the recorded music market, from independent record labels to distributors, and from artist management companies to other rightsholders. We are a mission-driven organization that operates like a not-for-profit and is funded entirely by our members at a 1.5% admin fee. Merlin’s world-class relationships, white-glove support, and suite of partnerships helps independents compete at the highest level.

Do you believe emerging territories like The Balkans are becoming pivotal in the global music industry?

Absolutely. Music platforms want to expand into and succeed in new markets around the world, and The Balkans are an important region for their growth.

Music platforms also want to engage directly with local rightsholders and artists. The Balkans represent an incredible mix of musical tastes and passions, whether pop and Chalga, folk and Sevdah, hip hop, rock, electronic, contemporary classical, and a myriad of other amazing musical genres. This year, Merlin was excited to welcome first-time direct members into our community from Kosovo and Romania – this is in addition to the numerous labels and artists from The Balkans represented via Merlin’s distributor members.

Finally, streaming, social platforms, and creator tools are lowering the barriers for artists to have their music consumed more globally (in addition to helping them better succeed in their own countries and regions). Subsequently, local music is only becoming ever more important, as has been mentioned in recent discussion around “glocalization,” where the global consumption of local music and the rise of new global trends bridge cultures and genres. Where in past years, global artists would dominate the charts in local territories; in the last year, the top 10 songs in Britain, France, and Germany come almost entirely from local artists, a trend we’ve also now seen across Asia, Latin America, and Africa.

How has the digital transformation impacted the independent music industry in regions traditionally viewed as 'niche'?

The digital music economy is one of the great equalizers for the independent music industry. It allows artists and labels, both in mass appeal and in niche genres, access to the same opportunities as those located in larger or more mature markets. This has come from the growth of streaming services (e.g., Apple Music, Spotify, and YouTube Music) and social platforms (e.g., Facebook, Instagram, TikTok, YouTube Shorts). 

Since Merlin’s founding in 2007, we have been at the forefront of ensuring our members’ rights are properly valued at a global level, regardless of the industry standards in their particular region. This comes in the form of superior commercial terms, access to trends data, and ensuring our members have the most comprehensive access to connect with fans, build new audiences and drive additional revenue sources.

These opportunities may not always come directly via Merlin, but labels and artists across The Balkans benefit indirectly if they work with one of Merlin’s distributor members. Our distributor members have heavily invested in regions around the world, in part, through the value of Merlin’s superior deals with digital partners.

What challenges and opportunities does Merlin foresee in venturing into newer markets like South East Europe?

As a mission-driven and community-based organization, Merlin’s overriding mission is to help our members maximize their independence. This is why Merlin’s membership has continued to expand globally — we now have direct members in 70+ countries around the world. At the same time, this means there’s 100+ countries where Merlin doesn’t have a direct member — this is exciting to our Member Relations team because we know our model benefits independents of all sizes, in any country, working in any genre.

In South East Europe, a core challenge, but also opportunity, is educating the labels, distributors and rightsholders about who Merlin is (the independent’s digital music licensing partner), what we provide (access to superior commercial terms, deeper insights, and more opportunities), and what we’re not (a distributor providing asset management, supply chain, and marketing services).

Trade Associations also serve a vital component of the independent music ecosystem. They provide a network of local, regional, and global support to independents. That includes, for example, representing them within the music industry and legislative bodies, leading trade missions, and developing member skills and knowledge via programs, conferences and educational resources. Merlin members that are also members of a country with a Trade Association receive a 50% discount on their Merlin membership, such that it’s a 1.5% admin fee (instead of 3%).

Can you share some advice for independent artists and labels from our region on maximizing their global reach through platforms like Merlin?

Merlin’s goal is the same for all of our members: to help them grow their digital music business, navigate the digital music landscape, and to stay independent. Our best performing members take advantage of everything Merlin has to offer. That starts with our superior commercial deals, but then extends into our best practices guides, our webinar sessions, and, of course, the bespoke treatment we deliver for our members. That could include advice on how to maximize marketing opportunities (via our Commercial Partnerships team), support on delivery or integration issues (via our Member Operations team), or assistance in accessing data, APIs or trend reports (via our Technology and Business Solutions team).

How does Merlin ensure equitable revenue distribution in growing markets, especially where industry norms might be fluid?

Merlins operate on four principles to better serve our members: trust, access, flexibility, and transparency. In an industry that has always been in flux, Merlin is the steady hand. Merlin doesn’t have investors looking for an exit. There is no parent company with different motives. We are a mission-driven organization that operates like a not-for-profit and is funded entirely by our members. Our Board is nominated from our membership and then voted on by our membership — this ensures that the voices of our membership are delivered via the governance and oversight of the Merlin team.

For every new deal (and renewal), our members receive a deal notice, upfront, that provides transparency into the terms of our deal so they can make an educated decision about whether to participate. Our members receive unredacted, unedited reporting files in near real-time as if directly licensed by the partner. And our members are paid on the fastest terms possible, with timely and consistent payments, because we understand this is our members’ money.

Once a member elects to participate in a Merlin deal, from that point onwards, the member now interfaces directly with the partner, the member delivers content directly to partners, and the member pitches directly to the partner.

We define our success solely through the success of our members, so you know there are no competing agendas.

How does Merlin's strategy differ when approaching established markets compared to emerging territories?

As we mentioned above, our strategy is to ensure that our members can succeed no matter their size, where they are located, and the artists and labels they support. It starts with our deals, where all of our members receive equal access, equal treatment, and equal opportunity. This comes in the form of global streaming partners (Apple Music, Deezer, Spotify, and YouTube Music), social platforms (Facebook, Instagram, Snap, TikTok), and unique opportunities only available to our members (Canva, Pinterest, Twitch). Whether a Merlin member is in an emerging market or a more mature market, we focus on creating incremental opportunities that help our members and their artists and labels succeed.

What trends or shifts do you predict in the independent music landscape over the next decade?

The desire from platforms to incorporate music into their products and features is unprecedented. This is being driven by music first (streaming), music adjacent (social, fitness, gaming), and consumer-oriented companies. We predict this will only continue to increase over the coming years. Yet the fragmentation and operational complexity in licensing music is as challenging as ever. We must find easier ways for platforms to legitimately license music, in order to drive additional revenue and value to rightsholders and their artists around the world. 

At Merlin, we want to help solve this problem. In the last year, we’ve seen a newfound desire—from both existing services and new companies—to ease the process of licensing music, while ensuring that rightsholders and artists are compensated fairly. This is especially good news for independents given the data we’re seeing: in more democratized spaces like social music — where the barriers between the music, the artist and the consumer are lower — we see a higher demand for a diversity of artists and a diversity of genres, which is quintessentially what Merlin members represent.

With the rise of independent artists and the democratization of music, how is Merlin adapting to support these artists in the digital age?

Merlin is always exploring how to provide new opportunities to our members that will accrue to their artists—whether partnering early on beta products, providing bespoke marketing initiatives, or campaigning for new or improved promotional or data tools. These opportunities can help our members and their artists reach and build new fans in ways that were traditionally reserved for artists on major labels. We also continue to forge new partnerships in social music and the creator tool space — in the past 12 months, we have announced deals with Pinterest and Canva, both of which help to expand our members’ catalog into new verticals.

To learn more, you can always find us at www.merlinnetwork.org or keep up with Merlin on our Instagram, Facebook, LinkedIn, Threads, and Twitter profiles @merlinnetwork.