Jeremy Sirota (Part 1): 'At Merlin we are driving value to our members'

 

When Merlin started 12 years ago, it was a small club of mostly European labels executives who had decided to aggregate their individual catalogues to achieve scale in their licensing negotiations with digital platforms. It was basically an attempt to have a seat at the negotiating table.

  Merlin now represents the fourth largest music catalogue of recorded music in the world, and has deals in place with almost every single platforms that matters. At the last count it had deals with over 30 digital platforms. 

  The revenues the organisation collects have seen significant growth in the past few years, reflecting the establishment of streaming as the main source of music consumption in the world. The sources of revenues are also much more diversified, with new regions such as Latin America, Africa and Asia accounting for an increasing share of income. 

  Merlin's membership has also fundamentally changed over the decade. Labels used to be mainly from Europe and North America (plus Australia). They now reflect the diversity of the world of music. In 2020 alone, Merlin welcomed 81 new members, with first-time members joining from Burkina Fasso, Ghana, Peru, Singapore, Slovakia, and the United Arab Emirates.  

  Another bright spot was Japan, where Merlin opened an office a year ago resulting in a growing number of Japanese labels joining the organisation (Avex, Amuse Inc., Bandai Namco, FABTONE, For Life Music, NexTone, Musicmine, and Yoshimoto).  

  Since its launch 12 years ago, Merlin has enjoyed a stable management, with Charles Caldas as the organisation's first CEO who served for 11 years. Caldas left Merlin at the end of 2019, and Jeremy Sirota took over. Sirota worked for Warner Music Group in the past and also for Facebook, acquiring a dual experience in the entertainment and tech sectors.  

  Over a year into the role, Sirota has unveiled last week a new-look Merlin, with a new logo and a new site, during a virtual “Celebrate Music!” event, bringing together its members, partners, the media, and the music industry for an event to honour independent music and celebrate the company’s rebranding.  

  Emmanuel Legrand had a virtual chat with New York-based Sirota last week to talk about the collective power of indies, the licensing marketplace, tech v. music, among other things. This is the first installment of the Q&A, with part II published next week.



Let's start with the virtual event you just organised, during which you unveiled a brand new logo, and a brand new Merlin. What was the message you were trying to convey through that event?
Jeremy Sirota: Great place to start. I have a legal background, I have a tech background and I have a brand design background. I spent a couple of years in that industry actually before going to law school. So this has just been a world that I’ve always been a part of. My mother’s an artist, and so I’ve always been very visually focused, I can be hyper workflow and process-oriented but very visually attuned. The visuals about what a company does says so much about it and so as we were getting to the end of 2020 I was thinking about the need for a new fresh look for Merlin. It was a tough year, a challenging year, and 2021 started off just as challenging. But through all of this, there is a thread of optimism that I’ve always felt even as we confronted these challenges. Within independents and within my team there is a sense of resilience, creativity, entrepreneurship. So what I wanted to do was better tell the Merlin story. We have the same strong foundation, the same strong fundamentals. Our mission and culture is the same, but this is just a new way of telling it to the public, our members, our partners. That was the impetus of all of this. We spent four months really working on a whole brand strategy deck that talks about how we think about our company and how we articulate our mission spun into new logo, brands, new website and a new way that we communicate. It is all derived from being member-led and music-focused. We are all here at Merlin because we believe in the independent, and in better tools to enable them to own their future. All of us are just total music people, we love music, we love the creative process, we love listening, engaging. so that really drove the process and the narrative.

I asked this question to Charles Caldas and I am going to ask it to you. What is Merlin? How would you describe Merlin? 
Jeremy Sirota: Well, we tried to get it down to five words. That was our goal so that if someone doesn’t understand what we do they can quickly understand it. Everyone had a different way of describing Merlin. In the end, we are the independent digital licensing music partner. Really, what we are is a company for independents that want to take more control of their future. We provide them that means through premium deals so they can compete at that level. That's what we do.

One of the factors that led to the creation of Merlin was to have strength in numbers when dealing with big platforms. Is that still part of the ethos of Merlin 10 years down line, or is it a given?  
Jeremy Sirota: The answer to that is that it's both. Merlin takes a collective approach to better enable us to provide access to our members to digital partners and to provide digital partners access to the most diverse and iconic music in the ecosystem. There is a benefit to both sides. There is nobody that doesn’t recognise the value of Merlin and what it brings. To me the question is not if people want or need to do a deal with Merlin, I think people want to do a deal first with Merlin, like we did last year with Snap.

For a lot of people in the industry, especially in the live sector, 2020 was a terrible year, but it looks like streaming consumption has reached new levels in the US, UK, France, Germany or Japan. From a financial perspective, will 2020 be a good year for Merlin and your membership?  
Jeremy Sirota: I think about it in slightly different terms. I don’t think about it as, did Merlin have a good year? I think about it as: Did our members have a good year? And that's not just semantics. We are framing our success through our members' success. That’s the mantra we use internally. How do we drive more value to our members? That's obviously through deals, quicker deals and ensure we are getting  premium deals but that's also through other ways: How can we push money down to our members? How can we turn things around for our members when a digital partner might be challenged about who they are going to pay first, who they are going to report to first? We’re up there. We’re first in line on behalf of our members and so there's all these simple things: make sure we have deals in place, make sure we are getting paid, make sure we are getting reported and how we can get into new partnerships for our members. We spent a lot of 2020 thinking about how we can drive incremental value and that’s really like how we can deepen our partnerships to allow for more opportunities for our members. We serve as a bridge, not standing in their way, but helping to create those opportunities. So yes, financially, we have performed quite well. We don’t have final numbers yet for the year so I can’t share anything right now but we performed well, which means our members performed well.  

What's your share of the global digital music market? 
Jeremy Sirota: 15%. 

Why is it that we don't see more artists from independent labels at the top of global streaming charts?
Jeremy Sirota: Independent, as you know, does not mean small. We have a range of partners that have local content, we have partners that have regional content and we have partners that are at a global level with superstars artists. There is a vast range of different types of members, different types of repertoire and different types of artists to appeal to different audiences. So that’s number one. Number two, it depends on what you are looking for. If you are looking at some local charts and local performance, I think one of the trends we saw in 2020 is that you are starting to see local repertoire perform better in a significant part of local markets. If you are looking at a global charts, you are seeing independent content but again I also think a lot of what you see is a lot of front loading from the majors in terms of marketing budgets. What you tend to see from independents is a more sustained promotional flow throughout the life cycle of an album and a release, so you may not have that big bang in the beginning. There’s a lot of diversity. I think independents look at how they can create a more sustainable performance from their artists and so they may not always pop up on the top 100 but they perform better overtime. I think that just speaks to the investment that independents make into their artists over the long term.  

We are also seeing now global hits coming from Africa, like 'Jerusalema' by Master KG from one of your members, Africori. Do you think it is a sustainable trend?
Jeremy Sirota: Michael Ugwu, who runs Freeme Digital out of Nigeria is on our board and he is having a ton of success with what he is doing, not just in Africa, but he is also looking at ways to collaborate and drive opportunities into different territories through collaboration with other artists. There an interesting evolution that's happening right now, whether it is local, localisation, regionalisation with new artists or new genres that are trying to find new ways to bubble up and find new audiences. I tend to think that always happens with independents. They are there first, they are the innovators, they are the ones who just are constantly looking at new ways to do that. It’s the little things like this that gives me the optimism about where we are headed.  

Another major shift compared to 10 years ago, is that Merlin was mostly a club of pretty solid European independent companies with Martin Mills (Beggars), Michel Lambot (PIAS) and Emmanuel de Buretel (Because), plus a few American companies. Now, when looking at your membership, it is much more diverse. 
Jeremy Sirota: I can only speak to the years I’ve been here. First of all, the three people you mentioned, I am a huge fans of all of them, they have been great proponents since I started this job and I really value their insights. They are a great force in our membership and all three of them still sit on our board today. The second thing I will say is that last year we added 81 members, and those 81 members come from a significant number of countries. In addition, at Merlin, we represent tens of thousands of labels because our distributor members are some of our strongest members. We have labels that now come to the Merlin membership from every country. Last year we had many more new members coming from new territories than we had before. That also was part of the new impetus for the new brand because even if the Merlin brand was there and in the world, I wanted to make sure that, no matter what culture or no matter the language, you could understand the use for it, understand what it meant, the value of it and whether it made sense for your business. I had the opportunity in my Facebook role heading up Independent licensing to travel all around the world, meeting independents from all over the world and one of the things that I know is that independent world is based on trust. Merlin has always had that. We are driving value to our members, to our partners, and to the music ecosystem.

One of the things you did was to beef up your data analytics team. Why is that?  
Jeremy Sirota: In a digital world data can be the difference that will help you identify the signals out of the noise. If you think about the range of members we have, they run across the whole spectrum: you can have a very small label run by two people to a very large record group that may have 100s of people, if not more. What we want to do at Merlin is supplement what they can’t do themselves, whether it's through the data that we have and being able to share that in an itemised fashion to help people benchmark and better understand the signals. More importantly, data from our partners is a key part of our conversation. There is always that thought of who controls the data, sure, but I think what is more important is the understanding that access to data for members, for labels, for distributors helps them to better understand the platforms, to better drive value. Sometimes [access to data] is presented almost in the confrontational sense, about who has it. I don’t think that is the right way to view data. What can we do with the data, given who we are as an institution to provide value to our members? I think we're just getting started here in exploring that and we’ve added some people, we’ve started doing more reports and this is a year when there will be a lot of exploration in that space.