SDC OmniMedia Group Magazine

CANNES, France (Jan. 20) - The world’s independent music sector which has produced such artists as the Arctic Monkeys, has grouped together to launch an agency to secure licensing deals with emerging media such as MySpace and YouTube.

The group, called Merlin, was launched at the annual MidemNet music industry conference with its backers saying it would become the “fifth major” in the industry.

The launch follows the rapid growth in popularity of sites like YouTube, where fans post video clips carrying their choice of music without permission from copyright holders.

The independent record label sector makes up for 30 percent of the music sold worldwide, with the rest from the four majors — Vivendi’s Universal Music, Sony BMG, EMI Group and Warner Music.

The group said it would aim to rectify the “poor cousin” status of deals previously offered to independent labels and will address the “growing assumption that, for emerging media, only the four majors need to be licensed, with the rest free to air.”

Merlin Chief Executive Charles Caldas, a former head of Australia’s largest independent music and entertainment distributor, said he had already begun talks with new media companies.

“The form of copyright apartheid currently being applied to the value of independent rights is unacceptable,” he said in a statement.

“Merlin will enable independents around the world to participate in new licensing and revenue models on competitive terms.”

Alison Wenham, president of World Independent Network, told a news conference in Cannes the agency would allow independent labels to achieve parity with each other and with the majors in getting a fair share of the revenues being generated by new business models.

As well as copyright issues, music labels are currently having to cope with music piracy and competition for consumer spending. Global music sales are expected to be down around three percent for 2006.

Wenham said the group would be a non-profit, privately-funded organization, based in London. It has already received backing from trade bodies in Europe, Canada, Brazil, New Zealand and Australia.

She said the group expected to announce its first deal within the next week.