Matthew Rogers, the chief operating officer of independent music label Unified Music Group, with Northlane guitarist Josh Smith. Credit:Chris Hopkins Smith said Northlane earned three-quarters of its recorded music income from digital sources. "We've seen CD sales stay the same, maybe decline a little, but a massive increase in revenue from digital and especially the streaming component of that," he said. Northlane's success echoes the findings of a report into the local music industry by Deloitte Access Economics, which put a value of $399.4 million on the Australian recording industry in 2014-15 – a figure larger than previously estimated. "We are the sixth largest music market in the world in revenue terms ahead of much more populous nations like Canada, South Korea and Brazil," according to the Australian Independent Music Market Report.

Metal band Northlane are signed to independent label Unified Music Group. Credit:Wilk The report found independent record labels and distributors – covering genres as diverse as classical, country, rhythm and blues and world music – made up 30 per cent of total recording revenue in 2014-15, earning $154.8 million and releasing more than 6000 albums and singles. Digital revenue from music downloads and streaming services (44 per cent) outpaced money earned from physical sales (33 per cent). The Cat Empire has benefited from releasing its last two albums independently. Stuart Watters, a spokesman for the Australian Independent Record Labels Association, which commissioned the report, said the independent sector played a vital role in the music industry beyond its financial contribution.

Two-thirds of the artists in contract with independent labels are Australian, including Northlane and The Cat Empire, and contribute 57 per cent of the sector's total revenue. The Cat Empire's manager, Correne Wilkie, said the band had benefited from releasing its last two albums independently: "Significantly, they also earn their income immediately, there's no waiting months for a royalty check (sic) – when someone downloads/streams a song that money goes straight into the band's bank account." Watters said small music labels broadened the variety of music produced in Australia, launching the careers of new artists and providing competition with the major music labels Sony, Warner and Universal. "Twenty years of digitisation have seen many economic titans' business models collapse," he said. "Yet indie music, never that profitable in the first place, is thriving – online, streaming, live – thanks to audiences' increased hunger for authenticity." Northlane is signed to Melbourne-based label Unified Music Group, and Smith said he could not imagine one of the major music labels doing a better job of representing the band.

"If you sign to a major label, there's a very high chance your deal's not going to be as preferable," he said. "So your chances of earning money off of what you're doing are a lot lower." Matthew Rogers, the chief operating officer of Unified Music Group, said the music industry had been "flipped on its head" in the past five-to-10 years. "The main financial difference is that it takes a lot longer to earn the same money from an album release," he said. "What you used to earn in one year now takes three or four years, but over 10 years the artist will make a lot more as they no longer have to pay to press bits of plastic with files stuck to them." Rogers said state and federal governments were beginning to recognise the financial and cultural value of a healthy music industry. "Politically the greatest challenge is being able to raise our voice loud enough to compete with well funded tech companies that have an agenda that is anti-copyright," he said.

"Changes to the Copyright Act that are being discussed at a federal level around Safe Harbour and Fair Use provisions would have a devastating affect on the broader creative industries and in particular the music industry." The report also pointed out that almost all music played on commercial radio is from the major labels. Watters said radio stations did not play enough Australian music, let alone Australian music from independent labels. However, Smith questioned the importance of radio: "I think if you're playing any sort of alternative music it's not really the be-all and end-all."