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Indie labels join forces

Seeking to merge their fragmented market power, small music labels form new trade group.

In the music business, online or off, indie is often synonymous with cool. But cool doesn't always pay the bills.

Betting that collective action will help give them more market power, a group of 125 independent record labels initiated a new trade group Monday night aimed at giving them more parity with the four major music labels.

Dubbed the American Association of Independent Music (A2IM), the trade group's membership and specific goals remain somewhat diffuse. But leaders--including top executives at some of the biggest independents in the country--say they're hoping to help give indie businesses the power their collective market share deserves as the music business is transformed by digital technologies.

"If the marketplace understands better how important the independent community is, there will be greater opportunity," said Steve Gottlieb, chief executive officer of TVT Records and a member of the group's board of directors.

Focusing primarily on the transformation of the music market online and in other digital distribution mediums, the group follows similar organizations that have successfully wielded collective influence in the United Kingdom and elsewhere.

The Association of Independent Music staged a mini-boycott of the initial launch of Apple Computer's European iTunes service, helping to get more favorable rates for its members there.

In the United States, independent labels have long complained that they receive a smaller percentage of revenues from new digital services than do big music labels like Universal Music or Sony BMG. Content aggregators such as the Independent Online Distribution Alliance and the Digital Rights Agency have helped narrow this gap somewhat.

This disparity has come even as digital consumption patterns show the scales shifting toward consumption of independent music, Gottlieb said. He noted that more than 30 percent of Internet radio play is drawn from independent artists and labels, a sign that independents should have the same treatment as the majors.

"Manufactured pop culture is disintegrating before your eyes as the Net takes hold, but some of these institutional biases hold on and continue into new media," Gottlieb said. "Any arrangement that treats music differently by virtue of it being owned by multinationals is not a good strategy and is doomed to fail."

The new trade group will be based in New York and plans to have a Washington, D.C., presence focused on legislation.