Look MERLIN the industry consortium that represents nominally “independent” labels is often held up as a spokesperson for the independent labels and artists.  You see this in the press all the time. First a comment from a major label spokesperson then a representative from MERLIN to give the “indie” viewpoint.   At the Trichordist we’ve long held the view that in  actuality MERLIN represents the interests of a tiny minority of “independents” that have some of the largest artists in the world. They DO NOT represent the interests of what most people would think of as “independent” labels.   The economics for those that produce mass market products (like pop hits)   is totally different than those that produce niche products (like progressive metal or indie rock). Yet time and time again we have seen MERLIN advocate for models and ideas that only work for the biggest players. Not independents.

Our suspicions were confirmed earlier this year when we saw MERLIN cut a payola- oops I mean “steering” deal with the famously anti-artist Pandora.   The history of payola clearly shows that it is a tool by which the entrenched players with substantial resources and market share keep the upstart independent players off of major media platforms.  We don’t see how this “steering” deal ends any differently.

Further MERLIN was so (there really is no other word to report the facts correctly) STUPID that they fell for a trick that Pandora’s Chris Harrison had previously used at DMX.   That trick was widely reported at the time. It’s jaw dropping that MERLIN was not aware it was being played. And exactly as we predicted Harrison took this “steering”deal a to the Copyright Royalty Board in an attempt to lower royalties for ALL labels.   Just as he did with the DMX deal. The pure incompetence of MERLIN regarding this deal should make independent labels reconsider their membership in MERLIN.

But this weekend at the  “Spotify House” at SXSW Caldas and MERLIN went further and made it abundantly clear where their loyalties lie.  Their loyalties lie with Spotify.   Caldas accused the major labels of having a “Napster moment” in regards to the free platform of Spotify.  While we are happy to see Caldas compare Spotify “free” to the original unlicensed Napster (because like the original Napster it pays jack shit to artists)  it seems a very very odd position for Caldas and MERLIN to take.  Why the hell does Caldas care that the major labels want to move away from the free tier and move it’s product to the premium tier?  Who the fuck is he working for?

If Caldas is right and the free tier is better for indie artists and the indie labels that he represents,  won’t the fact the major label product is behind a paywall help MERLIN labels?   Let them go dude!  Bigger audience for MERLIN labels.  But Caldas wants them to stay on the free platform?  Caldas position makes no sense. The only way this makes sense is if Caldas and MERLIN have some vested interest in Spotify.  Emotional, religious, ideological or otherwise, that is at odds with the interests of independent labels.   (BTW can’t wait for that Spotify IPO.  I bet there will be some artist attorneys interested in the who got stock.  Hell might even get an Eliot Spitzer type investigation.)

What’s really freaking bizarre about this whole episode, is within a few months we suddenly have the major labels taking a position against free streaming and letting artists opt out of the platform (despite their ownership stake in Spotify),meanwhile the leader of the consortium of independent labels angrily takes the opposite position.   What the hell is going on?

Tomorrow:  The math on why the current streaming model is a net transfer of wealth from small and middle class artists/labels to the big artists and labels.