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Amazon MP3 fuels indie gloom

Not exactly retail therapy

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Do you remember when the internet was supposed to "empower" new businesses, sweep away cartels and monopolies, and give a voice to the little guy? Well, unless you view increasing concentrations of power as a good thing, this week has been a bad one for the music economy.

Amazon finally launched its MP3 download service in the UK on the Wednesday, stealing the headlines with cheap deals. Yet popular acts who chose to opt out of the major label system received a kick in the teeth, with the front page carved up between the majors. Best-selling acts such as The Arctic Monkeys and Franz Ferdinand (both signed to PIAS group label Domino) are nowhere to be found.

As a "retail experience" goes, Amazon scores high on "efficiency" - you can find what you want and check out quickly. But there's more to an "experience" than the mechanics of purchasing. The Amazon MP3 store has the feel of a corporate warehouse, with no attempt to curate or promote good new music. And it's too bad if your startup label has created and then cultivated a strong brand for years, based on a well-chosen roster of quality acts. You can't search by label, and the acknowledgement that an act even belongs to a particular label is grudgingly displayed in the small print.

So Amazon doesn't "empower" anyone - except the biggest major labels.

Now many indie labels face a credit crunch of their own, as UK distributor Pinnacle went into receivership this week, with the loss of 94 jobs. Pinnacle owed money to some 300 small labels, holding some 2 million units in its Kent warehouse, Billboard reports. "This could drag some of the smaller labels down," a former employee told the newspaper.

The bankruptcy affects well-known acts, too. For example, US band Fleet Foxes have seen healthy sales in the UK, and were represented by a UK licensee, artist-run label Bella Union. Now labels have to try and get their stock back from the padlocked warehouse, and find another route to market in what's traditionally the peak retail season of the year.

AIM, the Association for Independent Music, held an emergency meeting yesterday to discuss the repercussions.

Majors have been ramping up their dominance of the shrinking recorded music market this year with a succession of questionable exclusionary practices. The majors demand large advances from digital services such as MySpace and Imeem, that ensure major content is promoted prominently. When indies do get a foot in the door, they may get only a quarter of the revenue a major receives.

The question for regulators is whether such tactics add up to a strategy? When we discover that majors insist on ownership stakes in major digital music portals, locking up the shop windows of the web, it's hard to see it as anything other than a bid to control the distribution channel.

Universal, Sony and Warner must be thankful for the indifference of the public. If Microsoft attempted such practices, it would make the front page. But for webloggers and commenters, democratic engagement with power begins and ends with a "to hell with record industry" rant - allowing the majors to quietly get on with the business of controlling the market. ®

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