Indies are furious that MySpace’s new music service – a service in which major labels own a stake – won’t offer independents the same kind of level playing field. In essence, each time an independent label sells some music, the major labels each makes some money. That’s making the indies pretty mad.
MySpace Music launched without deals in place for the independent labels, though it does have some arrangement with leading music aggregator, The Orchard. Now the indies are speaking up – and, as reported on the BBC – are threatening to boycott MySpace. (Does this mean MySpace has become a place for major label bands? A&R departments may have to seek unsigned acts elsewhere….)
Independents are understandably disappointed that this music service – touted as the platform for the music industry vision of future music services (now presumably with ‘flexible pricing’) has a vision that sees little value in the indie labels. (I do have a feeling we’ve been here before).
“It is both disappointing and astonishing that MySpace, built on the music of independent artists and labels, should, now it has the major labels as partners, choose to launch without those that have been at its heart, and whilst apparently treating independents as second class citizens,” said Beggar’s Group chairman, Martin Mills.
“The Orchard serves a valuable role in getting music that might otherwise not be heard onto digital services. Whereas our business model is based on getting best value from services rather than just being present in them, the Orchard have done a deal which they acknowledge is not on an equal footing with the majors, and appears to rely on being grandfathered into a better future deal through the efforts of others. That’s certainly great for MySpace.
“We, however, believe that independent music and artists are worth every cent as much as that of the majors, and will not be supporting this potentially exciting new service until we see fair play; we support the efforts of Merlin, established precisely to enable such services to deal simply and easily with the diverse independent community, to achieve this.” Mills added.
The indies are prepared to take their case to the world’s trade regulators, arguing correctly that with the service dominated by the majors the level playing field of fair competition is being skewed.
Mills explains: “We believe competition authorities around the world will take a keen interest in this; when you have a service, reportedly 40% owned by four companies with an 80% market share (presumably solely by virtue of the repertoire they provide to it) acting as a gateway with those four companies benefitting not just from their own sales, but from those of their competitors, questions have to be asked about market dominance. On the face of it, this would appear to be a move by the majors to regain control of distribution.
And there’s one more thing: “Also very worrying is that we find much of our content up and available on the new service, despite the fact that we have no licence in place with them,” said Mills.
Additional statements in full:
Bob Frank, President KOCH Records:
“It is unconscionable that it would give equity positions to the majors and treat the independent community as second-class citizens after having built its service on our backs, as its CEO has acknowledged. Our issue is not with the majors having equity, but with MySpace believing that we would accept this without similar terms. MySpace continually states that it is embracing the independents. It’s a pretty listless and cold embrace.”
“MySpace has done a horrible job analysing the independent landscape. They can continue with their ‘Orwellian’ approach to their statements and press releases but that does not change the fact that they have given equity to the majors whilst treating the Independents as second class citizens in a seriously anti-competitive and arrogant manner’.”
Tom Silverman, Founder and CEO Tommy Boy Records:
“Our lovers were cheating on us. Now we need to hire a great divorce lawyer. MySpace has been floundering lately already, and people have been moving toward Facebook and so on. This is going to accelerate that exodus. We can make a decision where we promote an artist, and we don’t have to do it with MySpace. We’ve had a great relationship for a long time, but times change, and new technology comes along.”
Rich Bengloff, President A2IM:
“A2IM is disappointed that MySpace Music, previously a champion of independent music, has not included independent music labels as equity participants as they have done with the major labels, thus not giving independently owned music labels parity. We are also disappointed that the launch of the venture included only a portion of the independent distributors and aggregators leaving out a large number of independent artists and labels from the launch.”
Simon Wheeler, Digital Content Director Beggars Group:
“We find the MySpace statement misleading at best, whatever MySpace has offered Merlin, and I am not party to those negotiations, it was not an equal opportunity to that which has been offered to the major labels, specifically on the point of equity in MySpace Music.”
“MySpace has not made any offer to unsigned artists either as far as I am aware… If the opportunity that they refer to is to make your music available to stream for free, then that offer is open to anyone, if it is to include getting compensation for streaming of your music, then that is not open to anyone except the major label partners, their distributed labels and a token indie [The Orchard] at this point in time.”
Oke Göttlich, CEO Finetunes:
“We embrace the idea of monetising online usage of music but can not understand why once again the majority of people who make music have been excluded from a global music deal. Although most of the musical content on myspace is from independent and unsigned artists, renumeration will be first spread to those who take care less on emerging artists – the major labels.
“This is hardly fitting with the fact that it was mostly unsigned and independent artists who helped to build MySpace and turn it into the huge and vibrant community we know today. We’ll see how sustainable the shared equity business of Rupert Murdoch’s News Corp and the major labels really is. Perhaps artists will soon be telling their fans: “get the real me…not at myspace.”’