Updated, 11:30 am PCT (June 13th): we’ve received confirmation from several large indies that Apple has already sent standardized contracts with pre-set terms to independent labels. We’re not sure what the terms of those pre-filled contracts are, however one source noted that they are less favorable than the major agreements. Another stated they are ‘substantially lower’ than what majors are getting. The original article, published Wednesday, follows.
You know the drill right when it comes to indie label licensing, right?
Well, it goes something like this: a major music service does a bunch of major label deals leading up to launch, and saves the independent labels for last (who often get an inferior deal). An indie label consortium named Merlin then conjures up some outrage, clamors for parity, and everyone works something out.
But is that about to happen with iTunes Radio? So far, the sealed deals we know of only include the major labels (Sony Music Entertainment, Warner Music Group, Universal Music Group), plus mega-publisher Sony/ATV. And depending on which report and/or source you read, majors like Warner have received advances and eventual shares of advertising, on top of agreed-upon per-stream rates.
So why hasn’t anything been mentioned on the indie front? One source noted that Merlin isn’t even at the negotiation table with Apple on this one, and Merlin head Charles Caldas has declined to offer any comment to Digital Music News. Which seems strange, since Caldas is usually the one making the most noise in these situations.
A2IM president Rich Bengloff, who might defer to Caldas in situations like these, has not responded.
One industry attorney told Digital Music News that Apple is unlikely to negotiate with thousands of indie deals, but could cherry-pick some of the larger indies with the most important catalogs (ie, Big Machine, Fearless, Glassnote, etc.) Those indie labels may get a seat at the direct-licensing negotiation table.
The other labels may simply get a form in the mail, with a note that says, ‘sign here’. “With iTunes Radio, Apple is going to come to us and say ‘sign this deal‘,” Dualtone cofounder Scott Robinson recently told an audience at New Music Seminar. “But with Sony and Warner there was a negotiation process.”
Another possibility is that indies (and anyone non-major, for that matter) are already inking deals, ‘independently’ or otherwise (no pun intended).
What else? Structuring non-major deals though existing, non-interactive rates is also certainly possible, though that would seriously complicate Apple’s attempts to avoid all of those usage restrictions and hassles.
More as we learn more.
Photo credit: Denise Mattox (Creative Commons by ND 2.0)