Ethan Bauley writes in to point out that a bunch of independent music labels are teaming up to act as a single entity to secure their own licensing deals with sites like MySpace and YouTube. The major labels have been able to convince folks like YouTube to give them a bunch of equity in return for not suing, but we've wondered how that would impact the independent labels. The same question came up when Microsoft agreed to give money to record labels for every Zune sold. In both cases, there were lots of questions about who actually got money and how much they received. While having a bunch of independent labels team up to sign such deals may make sure they're at least at the table, it's not clear it's really such a good idea. All it does is reinforce the big label's flawed plans for squeezing extra money out of places where they really have no legitimate claim for money -- and, if anything, it may make the independent labels less likely to experiment with more innovative business models that leave the major labels behind. It also doesn't actually solve the problem of figuring out who gets how much money. It just shifts the problems from YouTube, MySpace, Microsoft and others to the labels themselves. As Bauley points out, it's nice that the independent labels are making the need for the big labels increasingly obsolete, but it's not clear if simply linking up a bunch of independents to pretend they're also a big label is really the best way to go. Focusing more on innovative business models that recognize the value of happy fans and the promotional value of music (and how to capitalize on it) seems like a much better long-term survival plan.
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