At Billboard's Music and Money conference two years ago, a spirited discussion erupted on a panel when experts debated whether indie artists should strike lowball deals with emerging music streaming sites. Some came down on the side of playing hardball, while others insisted that indies should take initial losses in order to help sites grow.
No one ever raised the point that majors might also want to view some sites as loss leaders -- the idea just seemed ridiculous.
How things have changed. Last week, Merlin -- which describes itself as a "non-profit organization charged with representing independent music companies in enhancing the commercial exploitation of their copyrights on a global basis" -- announced it had signed a deal with streaming start-up Rdio. Deals get done all the time, but what's most notable about this one is that it happened after Rdio had deals with majors set.
Merlin head Charlie Caldas said the Rdio deal took several months to hammer out, with lots of constructive back-and-forth on both sides.
"We got to the point where there was a deal to be done that we were happy with," he said. "I felt like they recognize the value of our catalog, and it points to an increasing understanding of the importance of indies."
For indies, this means greater bargaining power going forward. The expectation that a label should simply sign over its catalog for less than its actual value seems to have fallen by the wayside. That doesn't mean that indies should become inflexible -- there might well be some great start-ups in the future where it makes sense to create a partnership that scales up as value increases. But most importantly, indies now have options.
Rdio CEO Drew Larner says he's excited about the deal and added that the catalog Merlin represents -- which includes labels such as Rough Trade, Warp Records, Yep Roc/Red Eye, Epitaph, Naxos, Naive, Tommy Boy, and One Little Indian -- is "tremendous."
Billboard named Rdio the start-up of the year for 2010 in August.