MySpace Music Accused of Leaving Out Indie Labels

MySpace Music Accused of Leaving Out Indie Labels
As News Corp. readies the "internet’s MTV,” MySpace Music, legal troubles are reportedly looming even before the site has gotten off the ground. According to a report by the Register, indie labels have risen antitrust allegations against the company because its new one-stop music mega-site is apparently locking out independents and blocking them from uploading their music to the new MySpace venture.

The Register alleges trouble is brewing over the deals inked between MySpace’s parent company, News Corp., and three of the four major labels, and none with the indies. And it’s this exclusive partnership with Sony BMG, Universal and Warner Music Group on the website, which will offer unlimited free streams, DRM-free downloads (free and for a fee), concert tickets, ringtones and merchandise, that has many independent labels crying foul.

Making matters worse for the indies, several are alleging they haven't been able to upload their catalogs, even though they own the rights, and are being excluded from the site. Part of the problem has to do with a simple rights-management issue. The program used to administer the metadata database on MySpace Music pays royalties to a major label rather than an indie if the major owns territorial rights to piece of indie music somewhere in the world. As a result, this means a U.S. major could pocket royalties from a UK indie.

According to MTV, so far one independent label trade organization, IMPALA, has asked European regulators to look into possible antitrust issues with MySpace Music, suggesting News Corp. and the major labels are aiming to block indies from the MySpace audience.

What impact an antitrust case in Europe would have on the North American music market is unclear but in the last ten years indies have successfully won two lawsuits against major label mergers in Europe: the Sony/BMG union in 2006 and the one between Warner and EMI several years earlier.

As of yet, no firm launch date has been set for MySpace Music, but some industry insiders have said it could be up and running as soon as this month.

Update: In a response to the Register article, MySpace has issued a statement to Exclaim! saying, "We are not aware of any antitrust complaint or inquiry pending against either MySpace or MySpace Music. MySpace Music welcomes indie artists and is not blocking content from them or other labels. Our goal is to provide the indie community with powerful tools and monetization channels to enable them to access revenue streams previously unavailable.”