A few years ago, Charles Caldas was running Shock Records, a relatively small music label, based in Melbourne. Today he is the CEO of Merlin Network, a London-based consortium of independent music labels. In the role, he has become one of the most prominent voices in the music industry as it wrestles with yet another seismic shift: the rise of subscription music services like Spotify and the commensurate death of the CD.

Earlier this year, that put him on a collision course with Apple.

The tech giant was in the final stages of preparing to launch its own streaming service, Apple Music, a key new product designed to replace its declining iTunes digital downloads business.

Apple planned to offer people who trialled the service three months of access for free, but thought it could get away without paying royalties for songs streamed during that period to so-called indie labels (i.e. any label that is not one of the three corporations that have historically dominated the music business: Sony, Universal and Warner).

To say that the indie community was upset would be an understatement. Caldas was worried Merlin's labels would not just be missing out on valuable royalties from Apple, but that the move could do lasting damage to royalty rates across the market if other services attempted to follow suit.

Caldas and Merlin decided to hold firm and not sign up to Apple's new service. It was a risky gamble. Apple Music was poised to become the biggest thing in streaming. The device giant already has 800 million credit cards on file for iTunes users and if it could convert a fraction of them into Apple Music users it would quickly surpass market leader Spotify, which has 20 million paying subscribers.  

Boycott brought change

But it worked. Perhaps sensing that it could not afford to launch without Merlin-aligned acts (they include Arcade Fire, Vampire Weekend and Adele) in its catalogue, Apple backed down, agreeing to pay royalties to indies, and a deal was agreed just before launch.

"The thing that the whole episode really shows [is that] what is good for the major labels and what is agreed by the major labels is not necessarily good for independents," Caldas tells Fairfax Media in an interview. "Apple listened to that and understood it and got the deal to a point where it was acceptable and all credit to them for that."

Taylor Swift, possibly the world's most prominent performer right now (but not on a Merlin Label) decided to weigh in on the situation at the last minute.

Swift published an open letter to Apple saying she would pull her latest album, 1989, from the service if royalties to indies were not paid. It no doubt helped the indies' cause, but it was behind the scenes negotiations involving Caldas that secured the victory.

To Apple, Love Taylor http://t.co/GN9jiRkqlj— Taylor Swift (@taylorswift13) June 21, 2015

"Taylor Swift is in the Taylor Swift business and she is incredibly good at it," says Caldas. "Clearly her statements on Apple mirrored what we were saying. It's good to see artists speaking to the same issues we were speaking at."

We hear you @taylorswift13 and indie artists. Love, Apple— Eddy Cue (@cue) June 22, 2015

Much of the music industry has been sceptical about streaming in general, and market leader Spotify in particular. Swift famously withdrew her entire catalogue from Spotify due to that service's free tier.

Radiohead frontman Thom Yorke described it as "the last desperate fart of a dying corpse", and Talking Heads singer David Byrne has also been highly critical.  

Consumers want streaming

But Caldas recognises the reality that consumers are flocking to streaming platforms in droves, and that streaming offers the beaten and battered music industry its best chance at getting people to pay for its product again.

"I'm not a big fan of beating up our retailers as a way to resolve anything," he says. "I don't subscribe to the silver bullet theory of the future of the music industry, where one form of consumption is going to dominate totally. As with any market there is going to be all sorts of ways people pay or don't pay for music."

"But the thing that no one can ignore anymore is the growth dynamic in streaming, both in terms of the number of subscribers on existing platforms, like Spotify, and the entrance of players like Apple. That has to point to a future where this model is going to be an integral part of the business."

Analysis by investment bank Credit Suisse last year found that the global recorded music industry could return to growth in 2016 for the first time this millennium due to widespread adoption of streaming.

That is because the annual cost of a subscription to Spotify or Apple Music (both $12 a month in Australia or $144 a year) is more than what the average consumer spent on music, even during the glory days of the CD, before piracy ravaged music sales.

Indie wins on stream

The other reason Caldas is so supportive is the fact that independent music does disproportionately well on streaming platforms, relative to CD sales, which were dominated much more by music produced by major labels.

"It's not a traditional store window, where there are things featured at the front and deeper catalogue at the back, and where you were basically able to drive people into much narrower channels to consume what you wanted them to consume, which is what the major labels have always been good at," he says.

"The streaming dynamic, and we have seen this consistently over all the services, once you give the consumer that freedom, they do explore more deeply and widely. There's no tightly controlled channels anymore. That doesn't suit the major label model."

Merlin has signed deals on behalf of its member labels with streaming outlets major labels have been wary of, such as Pandora and Soundcloud. The organisation also holds shares in Spotify as part of an early licensing deal The means it could be in line for a windfall if the Sweden-based service ever files for an IPO, as its French rival Deezer has already done.

But Caldas isn't getting swept up in the excitment of streaming music IPOs. "[An IPO] brings pressure to grow and deliver. I'm always nervous about music companies and the stockmarket, our business is cyclical," he says. "History is not littered with success of music IPOs".

He's in the country to attend the Australian Independent Record Label Association (AIR) Awards in Melbourne and meet with local labels to discuss the streaming dynamic.

"It's pleasure to come back. Australia is a fascinating market in that it's so ready to adopt new technologies and innovative forms of entertainment," he says.

Caldas was named on Billboard's International Power Players list but he isn't keen to reflect on his status as the most powerful Aussie in music.

"I don't think I'd agree with you on that characterisation, but what I'm proud of is what Merlin has achieved in a short amount of time in enhancing value for independents," he says.