Last.FM Adds SonyBMG. Are Major Labels Trying To Shut Out Indies?
CBS owned social music network Last.FM has signed a deal with SonyBMG to bypass SoundExchange and other middle men and direct license music from SonyBMG. (press release) That leaves Universal the only major label holdout. Start-up Slacker is also cutting direct deals with the major label groups.
Kurt Hanson of AccuRadio and the Radio Internet Newsletter thinks that this kind direct licensing is the real end game for the major labels and that they are using absurdly higher royalty rates demanded
starting next week from SoundExchange to force broadcasters to deal with them directly.
Who looses if the major labels make direct deals with the major broadcasters? Artists and indie record labels both loose. Some of the potential ramifications of direct deals include:
- lower payments to labels and artists
- major labels could set priorities effectively shutting out indie product. Remember the "special arrangements" labels had with MTV that guaranteed certain videos got played?
- indie labels could be forced to waive all royalties in an attempt to compete thus cutting off an important revenue stream
- internet stations that want to play indie music are forced to license product from thousands of small and often understaffed companies
Are direct licenses and higher royalty rates part of a conspiracy by the major labels to take back the power that they lost when the digital age arrived? We’re starting to wonder…
Tell us what you think.
I can’t get too upset about this. Last.fm’s independence is what made it successful; they will fall apart if there is content control. The majors are making deals with the big streaming sites because they know that if SoundExchange is successful, there will only be a handful of options for internet radio and those companies will have a big upper hand in negotiation.
And indie licensing outfits are a dime a dozen; no “small, understaffed” label worth their salt should be handling their own licensing.
Now it’s clear why LastFM didn’t take part in the Day of Silence.
Although the first commenter mentions that “they will fall apart if there is content control”, this was the same assertion made whenever majors began having too much influence on radio. And what was the result? Massive homogenization of the airwaves.
This will result in “DARK PAYOLA” (google it). Instead of labels paying radio for plays, internet radio gets to pay labels *less* but with the same results…Major labels call the shots on what is played, because if a radio station rebels, the Majors cut their ties and the radio station has to pay the crippling CRB rates.
As an indie music start-up the failure of congress to intervene in the CRB debate is a worst case scenario. There goes another potential revenue stream!
Although the first commenter mentions that “they will fall apart if there is content control”, this was the same assertion made whenever majors began having too much influence on radio. And what was the result? Massive homogenization of the airwaves.
well, yeah, except that massive homogenization is what led to the popularity of internet radio in the first place–nobody likes hearing the same ten songs all the time.
the big internet radio stations and, more importantly, streaming services like slacker and last.fm have the upper hand. the majors can’t ignore them any more than they can ignore the blogosphere.
maybe i’m missing something, but can’t the stations just walk away and not do the deal if they don’t like the terms? it would be one thing if none of the majors were willing to play ball, but last.fm was huge before it signed up with sony this week, and it’s still huge even without universal.