Many independent music labels are questioning their futures after Monday's announcement of Universal Music Group's plan to acquire EMusic for approximately $23 million.
Independent labels signed long-term deals with EMusic that gave the digital music company exclusive rights to sell downloads from their catalogs. Those exclusive contracts are expected to carry over to Universal once the deal closes, which could cause a rift with independent musicians.
Some see the deal as beneficial for artists looking to catch a break. After all, their music could potentially end up on Duet, the new online subscription venture formed by Sony and UMG.
Others are more concerned with control over their work. After purposely avoiding the major labels and signing on with an independent label, their music now seems to be under the control of one of the companies they'd tried to avoid.
"I congratulate Universal for seeing EMusic's catalog of music as valuable," said Jenny Toomey, executive director of the Coalition for the Future of Music. "However, I wonder if there are any independent artists out there who are concerned about the fact that their catalog is now owned by a major label."
Under the terms of the deal, Universal Music Group will purchase all of EMusic's outstanding shares (EMUS) for $23 million, at a cost of 57 cents per share. No word on how, or if, the independent musicians whose work formed EMusic's backbone would be compensated from the deal.
For Jeff Price, president of indie label SpinArt Records, the initial reaction to the deal was concern. However, he said the move could generate more traffic for the label.
Regardless of his personal feeling, Price said that deals like this come with the territory in the music industry.
"One of the things that I've come to terms with, and I don't like it, is that the Internet is not a garden of democracy," Price said. "The Internet is a cartel. It's not about having a nice storefront, it's about having the products that people want and generating Web traffic."
Of course, the independent labels all signed the deals on their own, many taking cash advances up front.
Price said that many of the artists who purposely avoided major labels in order to have more control over their work would be concerned by this. However, Price added that it could help some of them by creating a larger audience for their music.
"(The) music industry is essentially controlled by five companies," Price said. "If you want to get music out there you have to go through one of them."
