Indie labels sign download deal

After lengthy negotiations, the agency representing top UK artists such as Arctic Monkeys joins venture that will delight music lovers

A battle between independent record companies and online giant MySpace has been resolved this weekend after a year-long wrangle over money. The deal, which will see music from leading British artists such as Arctic Monkeys, Adele and Antony and the Johnsons available on the site, ends the latest skirmish in the war between online firms and the music industry.

When MySpace Music, which allows users to pay to download music and buy merchandise, launched in the US in September 2008, the partners in the venture included four major record labels – EMI, Warner, Sony and Universal – and a handful of independents. Many smaller record labels refused to join the site as they said that they were not being offered favourable terms.

But now, after a year of haggling over terms, the independent labels are at last to join the scheme. Among them is the independent music agency Merlin, which represents 10 per cent of the global music market, and, with it, labels representing British artists including The Prodigy, Adele and Franz Ferdinand.

The dispute between independent record labels and MySpace music was the latest in a line of clashes between file-sharing websites, online retailers and record labels in recent years, as the music industry has struggled to adapt to the growth of online music.

An offshoot of MySpace, the social networking sensation which launched in 2005, MySpace Music has 18 million users a month in the US, has recently expanded to Australia and New Zealand, and is soon to launch formally in the UK although surfers here can already browse the site. MySpace is owned by Rupert Murdoch's News Corporation.

"In the past three or four years, record companies have made several leaps of faith when it comes to doing deals with a range of online music services," said Adam Liversage, a spokesman for the British Phonographic Industry (BPI), the body representing record labels. "There are probably more music retailers online now than you'll find on the high street."

Charles Caldas, chief executive of Merlin, said: "We were very critical of the venture when it first launched. You had a brand based on the values of diversity of the music it represented, yet it was being done only by four record labels. The deal is important for our members and for independent record companies in general. It has taken about a year of negotiation, but we needed to strike a deal that allowed us to get into the merchandising opportunities."

The companies would not reveal the terms of the agreement, which will be announced tomorrow. "We're excited to have Merlin's labels join our platform," said Courtney Holt, president of MySpace Music. "We can now provide our users with access to the rich catalogue that Merlin brings while simultaneously enabling Merlin labels to monetise their content within the MySpace community and easily track their fan engagement via our artist dashboard."

Music makers vs the internet

July 2000: File-sharing site Napster, which had 60 million users, is shut down after a legal battle with the Recording Industry Association of America.

September 2008: MySpace Music launched with EMI, Virgin, Warner and Universal as main partners. Independent record companies claim they are being "shut out" of revenue streams.

October 2008: Apple threatened to shut down iTunes music store if the Copyright Loyalty Board ruled that royalties paid to artists must be increased.

December 2008: Warner blocks YouTube from screening videos belonging to its artists.

September 2009: Warner and YouTube strike a deal to allow the record company's content to be screened on the site once more.

November 2009: Internet users who illegally download music risk being cut off under new laws.

November 2009: Merlin and other independent record companies join MySpace Music.

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