Feeds

Rdio snubs 'second rate' Indies

Kazaa founders now in bed with majors

The Essential Guide to IT Transformation

Exclusive So much for the rebels socking it to The Man. The would-be "Spotify-killer" music service unveiled yesterday by former Kazaa founders Niklas Zennstrom and Janus Friis is happy to be owned by major labels. But Rdio won't extend the same offer to the Indie sector, The Register has learned.

As with Spotify, the majors (Universal, Sony, Warners and EMI) were offered equity in the music startup. But Rdio has refused independent representative Merlin the same courtesy of an equity stake - even though the label negotiates on behalf of a significant share of the market, effectively declaring that it considers indie music 'second rate'.

Individual indie labels can still negotiate licenses with Rdio, but Merlin was created as a "fifth major" to negotiate collectively on their behalf.

Labels take equity in music startups when they're leery about their ability to make money. Which is most of the time. The tech company typically gets preferential royalties from the deal. But it's a mixed blessing for the startup, and some have overpaid and seen most of their equity swallowed up by fees to majors. And managers and individual artists aren't happy about the transparency - since there isn't really any.

But by excluding independents from such deals, the four majors risk accusations that they're acting as a cartel, and closer regulatory scrutiny. The Big Four snubbed eMusic for years because the service insisted upon selling DRM-free downloads. Three of the four still do.

Zennstrom and Friis aren't short of a bob or two. They personally pocketed $510m after selling Skype to eBay, but were then able to buy back a stake in the company last year, after eBay finally decided to get shot.

Merlin hadn't responded to our request for comment in time for publication; if they do we'll let you know. ®

Bootnote

Yesterday we described Kazaa as a poor clone of the Gnutella code released in 2000 by Justin Frankel of Winamp fame. There was one good thing to come out of Kazaa, though. Anthony Rose joined Project Cartel as CTO earlier this year.

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.