A number of independent labels have joined together in a move which could have far reaching consequences for the music industry. Labels including heavyweights like Epitaph, Beggars Group have formed Merlin, a collective licensing agency which would allow independents to establish the same kind of market power and negotiating ability currently enjoyed by just four major labels. The organization will represent the labels in negotations with major digital retailers like iTunes, and the result has been likened to a “fifth major.” Merlin will allow online stores and other digital platforms to access its members’ music in one deal, rather than the thousands of separate contracts they would otherwise have to negotiate. Labels will also be able to continue selling independently through their existing distribution networks. The move is also remarkable because it stands to allow the indies to break the major’s stranglehold over distribution channels. The stranglehold has been the subject of frequent antitrust concerns, and has allowed the majors to account for 70% of the entire music industry, despite releasing only 20% of albums.
Jan222007
