What's in Merlin's Bag?

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This is Celia Hirschman with On the Beat for KCRW.

This week, the newly formed world trade organization for the independent record sector, called Merlin, announced the appointment of their 15-person board.

Their first order of business is to define their mandate. Just what could a worldwide trade organization do for independent labels?

Honestly, a lot. After British indy labels their own national indy label coalition called AIM, or the Association of Independent Music, they got busy. The group was able to demand equal payments for music videos shown on MTV, as their major label counterparts had already been receiving for years. AIM was also able to pressure iTunes to pay the same royalty rates to indy labels, as it had for major labels. And though the practice began in the UK, iTunes agreed to follow the equal royalty rate plan with their US indy labels as well.

But it's not going to be easy for Merlin. Though the trade organization collectively represents over 80% of the world's new releases, their financial impact on global record sales is only 30%. There are many reasons for significant imbalance, and one of Merlin's first orders of business will surely be to try to even the lopsided playing field that the major labels have long controlled.

Here in the States, major labels have enjoyed market share domination in many of the areas that drive consumers to buy music. Commercial radio rarely plays independent records. The stations argue that indy artists sound different than those signed to major labels, and stations want to maintain their familiar brand to consumers. AIM's sister organization in the US, called A2IM, has been successful in getting large radio groups like Clear Channel to agree in principle to program more indy music. But enforcement is difficult and Clear Channel sounds the same as before.

The UK doesn't share this problem of major label domination of the airwaves. Music on Britain's radio is programmed primarily on the basis of the sound of a record. That's one of the key reasons the UK music market is so robust and active.

Here in the US, the print medium isn't much help either.

Most newspapers and magazines favor the major labels, who provide the most advertising dollars and editorial support. Just imagine if the majority of the music reported in People, Us, Rolling Stone and Spin was independent?

The web is the great equalizer in this regard, but with so much availabile, it's hard to find the great indy talents amidst the sea of releases.

In fact, the only large sector in the record business that has supported independent music in America is the mom-and-pop retail community. Independent stores have banded together, creating coalitions to provide focus and resources for the independent artist. They fiercely guard their stake in the indy sector because they have to. Their livelihood depends on it.

In a related story, the eleven Virgin Megastores in North America have just been sold to the investment company, Related Companies. Related Companies has over $16 billion in assets, spread over real estate properties. There are no immediate plans to close the retailer, though the real estate values for the Times Square and Union Square locations in New York may have been the significant factors in the deal.

In this ever-changing climate of diminishing opportunities for independent labels and artists, let's hope this new trade group provides some substantive help to keep the dream alive.

This is Celia Hirschman with On the Beat for KCRW.