Tuesday, May 27, 2008

'Guerillas' In The Mist?

New Cooperative Merlin Seeking To Be a 'Major' Player with No Gameplan Other than Its Size

KC Shoen


It is amazing what travels under the media radar as it pertains to the industry of music.

It would seem that Charles Caldas, a long-time veteran CEO with Victoria, Australia-based Shock Records has taken on the role of "Biggest Gorilla in The Room", successfully launching Merlin Network, an internet-based co-operative basing its ‘conceptual mandate’ to act as a guardian for the rights of independents to fairly gain a share of the marketplace via distribution through alliances with SNOCAP, and engaging in negotiations with soon-to-be launched Myspace Music for fairer placement and representative exposure, which is tantamount for any indy artist to assist in gaining traction and monetizing their art.

Charles Caldas 2

Charles Caldas-CEO/Merlin Network

The launch itself, which took place quietly on November 19th, 2007, has (according to a May 5th Article in ars Technica) garnered support and alliances from 12,000 independent labels worldwide within the last month of Merlin’s official door-opening to applicants desiring its umbrella services. From notables such as NettWork , Koch, Razor and Tie, and Charles’ alma mater, Shock Records joining the alliance, Merlin’s CEO believes that by galvanizing these vast numbers for the sake of being a one-all ‘licensing rights clearinghouse’ will better position itself at the bargaining table against the likes of Universal, SonyBMG, and Warner Music Group, being brandished as a ‘Fifth Major’.

The fragmentation that has always been the crutch of the independent label has been widening within the last five years due to the slow death of the Majors themselves, the imperative becomes to regain that lost stronghold, and according to Mr. Caldas “where it is clear that a central negotiation is the only way in which to achieve access to, or an equitable share of revenue streams.” It is no secret that the Big 4 are still trying to reassert their dominance via the constant outpouring of mainstream mediocrity and band-brand recognition in hopes to retain control of the very market it help to create. The same one they are losing in droves. Indies accounted for 27.5 percent of total music sales worldwide, which amounted to be the largest portion entirely for 2007.

Conceptually, this makes sense. The fragmentation now reaching epic proportions represents a sort of untapped market in itself: a vast and valuable hidden treasure waiting to be unearthed, with Merlin presiding over it, assuming the position to deliver back to its coalesced indie alliance by way of trickle-down revenue sharing that would give greater ability to launch new acts who are up-and-coming, and sustain operations for each label without encumbering the way each one runs day-to-day. Allegedly, all would benefit, including my label.

The Bigger Gorilla would be a Nicer Gorilla.

And disintermediation would be to the advantage to all as part of our participation. Disintermediation, at present, many of us have already substantially taken advantage of in many forms. Enhancing competition is very important indeed, and Charles Caldas understands this. His work at Shock Records and some of their incredible success as an independent label is attributed to his work He states further to the intent of Merlin “ I believe that all independent labels, distributors and aggregators should join Merlin. The broadest possible membership will not only maximise the impact of Merlin but also allow us to enhance the ability for our members to compete in the market.” which would imply safety in strength of numbers. This Gorilla having many arms and legs.

But Gorillas become guerrillas when unchecked.

EMI and Warner music in their earliest beginnings brought forth this type of all-in mentality: for the greater enhancement of lesser-known, but talented artists and bands. And look at what they have become. It is not to suggest that Mr. Caldas has any ill-intent with the creation of Merlin, and the organization offers an opt-out policy, with no fees or percentages attached for membership, but this approach leaves questions as to its validity and viability. Sure, as a united front , Merlin now has something that the indies separately never acquired and that’s clout, but as all of us are trying to eek out monetization and control over our respective destinies the question becomes at what cost?

I have a difficult time adjudicating to the perception I stand an equal chance at consideration for distribution/licensing/exposure amongst the likes of more visible labels such as Koch, or Nettwork Records. Arguably, how much of the revenue-sharing is going to be as protractedly meaningful with lesser known labels and artists, whose rosters are equally as strong, going to gain in that system? And as being purported as a ‘Fifth Major’, what good is it to be part of a large monolithic cooperative that encompasses so many labels, each with their own agenda, dynamics, and revenue stream? The logical assumption would be that the smaller guys still lose out by virtue of their obscurity against larger, more well-known independent labels which leads to the last, more important question: What can Merlin do for labels such as mine that I can’t do for it?

One would think I could go directly to Merlin and ask, but the truth is, they don’t even know. After poring through their website, all I found amounted to be nothing more than a collection of mission statements and subdued ‘cheerleading’, with nothing concrete in the mix. To be fair, they have only in existence since last November, and are still in a development phase, while currently negotiating with the likes of Myspace, which is pretty heavy in itself. The clout is there by it shear numbers, but numbers alone does not automatically equate to a lucrative outcome for all.

Here’s a really extreme example: The U.S. Government sent our military into Indochina (Vietnam) with the sole intent of “relinquishing control of the Southern region from the communist scourge” The French bailed in ’59, and the U.S. began a ‘police action’ where in by it attempted to train the southern Vietnamese to take arms against the communist infiltrators that where trying to unite the country under one governmental regime. By 1962, John F. Kennedy, in several meetings with his Cabinet, noted how the southern Vietnamese seemed uninterested in taking up such arms, almost willing, in some respects, to join with the North in unification. Seeing no sense in further participating in an attempted democratization, Kennedy began to move towards withdrawal altogether, but due to the Bay Of Pigs fiasco, the Arms Race, and The Race To The Moon (NASA Program) he was unable to follow through with his intentions. By November ’63, it was time to turn focus toward re-election..and then came that fateful day in Dallas. The Vietnam War itself became the war we meant to loose, and a large reason for that loss was three-fold:

1) The politicizing of the War at home; with politicians not allowing military brass to complete their mission as they were intended.

2) The growing antipathy and hostility among the general public, whom were not in line with the vision of the war, exasperated by the lack of vision given by the American Government as to what our purpose was in Vietnam

3) The internal corruption at the highest levels of the both the U.S. Military and The U.S. Government, further expunged for the general public to witness, which furthered the hostility and drained any potential public support for the war itself.

There was also the component of jungle-style guerrilla warfare administered by the Viet Cong on the ground, the likes of which never the American Military was unaccustomed to dealing with at the time. No game plan was properly administered by the U.S. Department of Defense to cope with such deviate warfare. Could it have been? Yep. But just because you’re the Biggest Gorilla on The Block, does not mean you can’t be taken down by Other ‘Guerillas.’

Numbers alone won’t win the day. There has to be a discernible gameplan. Merlin at present doesn’t possess one. It seems banked upon the sole fact that 12,000 labels are ready to go to war at the bargaining table against the Big 4. This is all very romantic, to be sure. But in that room it will be a Gorilla verses several Guerrillas, and given the abbreviated historical reference I’ve given above, who do you think stands the better outcome? And given the intended internal design of Merlin, what would stop this group from becoming palm-tree snipers in the rain of gunfire in this war, just to compete?

It will be bananas verses bullets, really.

To join a group of evil music industry veteran Snipers, or to join a group whose only brinkmanship is standing 12,000 labels tall ?

My bet’s on the Guerrillas..and, potentially, the Big Gorilla to turn the same way after all is said and done..

Me? I’ll stand watch. And stay on patrol..for now

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