Full Text Of Orchard MySpace Letter To Labels

Digital distributor The Orchard sent an email expressing concern over how MySpace Music may be treating indie artists and labels. In a commentary I wrote about how MySpace and other music 2.0 companies treat indies will shape the next phase of the industry and the importance of indies sticking together for fair treatment. Here is the full text of the original email from Orchard CEO Creg Scholl:

Orchard Artists & Labels,

Most of you have probably read news of MySpace’s intended music service launch.  If not, you can read a bit about it here:

http://www.digitalmusicnews.com/stories/040308myspace/view

Given the vital role MySpace plays in many of your careers, we wanted to take a moment to assure you that we’re on it, and also share a perspective:

• We are in conversation with key executives at MySpace…

to ensure Orchard artists and labels participate in their new venture, assuming we strike fair terms respectful of the vital role independent artists and labels play in the overall music industry, and have played in the development of MySpace itself

• News reports indicate that this new service is a joint venture between MySpace and at least three of the four major labels, and that in exchange for supplying the store with their music, among other possible contributions, the major labels have been given equity in the new venture
• If news reports are true, it is unclear whether and how the equity the participating major labels received will be shared by them with their artists, or with the independent labels they simply distribute (yet count in their overall market share, and whose music they presumably intend to include in the MySpace service
• To our understanding, independents have not been offered any equity.  However, we will make a strong and unequivocal commitment to you: very simply, if we negotiate for and receive equity, we will share it with you
• We appreciate MySpace as a unique social phenomenon and the fact that many of you rely on MySpace as an important part of your web presence and fan connection.  Thus, we engage with MySpace respectful of the role MySpace plays for many of you.  We do not take this opportunity lightly, and we will constructively but aggressively advocate for you …  as we always do
• Digital retail is fairer than physical brick-and-mortar retail ever was.  iTunes led by example and helped to shift music industry dynamics towards a more level playing field for all industry participants (for example, in their continued efforts to further standardize pricing, and their reasonably democratic way of dealing with placements on the site).  In that light, if reports are true, the apparent MySpace licensing approach is troubling.  It hearkens back to a time none of us wants to revisit … Where independent artists and labels were third-class citizens in the global music economy, instead of the second-class citizenship (with a good chance for an upgrade to first) that we enjoy today
• On a related point, we believe there will also be news as to how this affects SNOCAP and the current MyStore concept, so stay tuned on that front

We will continue to constructively engage with the MySpace team about their service.  We remain optimistic that in the end, it could well be a great thing for independents and for digital music.  This could turn out to be a productive new addition to the digital retail landscape that benefits all of us.  In fact, the MySpace CEO, Chris DeWolfe, addressed his commitment to the independent sector specifically today:

http://www.digitalmusicnews.com/stories/040308myspace2/view

However, actions, obviously, speak louder than words.

We sincerely hope that we have great news to share as we work towards an agreement that protects your rights and recognizes the vital role you have played in building both the music industry and MySpace.

Best,
Greg Scholl
President & Chief Executive