Independent Record Labels Pool Their Resources for Online Distribution

According to the Associated Press, “independent record labels behind artists like The White Stripes (on British label The Beggars Group), Deep Purple and Arctic Monkeys announced a global deal Saturday to pool access to their catalogs, seeking to grab a bigger share of online music sales from the major record companies.”

The companies have signed up to Merlin, a nonprofit licensing agency that will now be responsible for making deals with distribution sites like Napster and Apple Music Store. The deal, linking indie and trade groups from over a dozen countries will allow digital distributors to strike ONE deal with Merlin that will open access to selling the digital music of all its members instead of making individual deals with hundreds, if not thousands, of independent labels.

This will potentially flip favor over to the indies in terms of taking their share of total music revenues in the industry. Even though around 80 percent of new releases each year are indie, it only results in 30 percent of industry revenues. Most independents have maintained a tight control over their digital distribution until now–perhaps due to the fact that when they go to deal with online stores like Napster and iTunes, they are asked to comply with receiving smaller royalties than artists represented by one of the four major labels: Universal/Vivendi, Warners, Sony BMG and EMI.

And according to an interview with Beggars Group chairman Martin Mills and AIM rep Alison Wenham with the Register:

Mills told us that the move to a one-stop licensing agency for indies began 18 months ago, but had been accelerated when Universal Music cut deals with YouTube and MySpace as 2006 drew to a close.

Alison Wenham of the UK-based Association for Independent Music (AIM) confirmed that indies would demand the removal of content from sites such as YouTube if they didn’t cut Merlin a similar deal to the one negotiated by Universal Music, the world’s biggest label.

This potentially revolutionizing agreement, making indies the digital “Fifth major”, was announced on Saturday at Midem, a music industry gathering in Cannes, France.

Published by Laura

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