Labels feel cheated by site's new service

Reaction to the launch of MySpace Music was quick and relentless Thursday as indie labels and competing websites felt cheated and overlooked.

One of the strongest criticisms came from Bob Frank, president of Koch Records, a label that was built up on catalog acquisitions and has become a major player in the rap world over the last several years.

“It is unconscionable that it would give equity positions to the majors and treat the independent community as second-class citizens after having built its service on our backs, as its CEO has acknowledged,” Frank said. “Our issue is not with the majors having equity, but with MySpace believing that we would accept this without similar terms. MySpace continually states that it is embracing the independents. It’s a pretty listless and cold embrace.”

MySpace, owned by News Corp. and operated by Fox Interactive, is a social networking site that has become a key avenue for the promotion of music from the unsigned up through the majors’ biggest stars. MySpace Music, which launched Thursday, is a joint venture split 60/40 with the four major labels.

Merlin, which traffics in global independent rights for music, is in negotiations with MySpace to make its client’s music available on the site. But while those talks continue, Merlin CEO Charles Caldas noted, the major labels are competitors and clients on the site.

“Without an equitable participation by independents, that creates a situation that is both unhealthy and dangerous,” Caldas said. “It is incredibly disappointing that MySpace will launch their new service without having finalized a deal with the world’s most important independent labels and artists.”

Online entities Imeem, Last.fm and AOL were among the companies that went with full-court pressure to the media touting services similar to the offerings on MySpace Music.

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