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Tell the FTC to Stop the Music Monopoly -- Support Music Freedom

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Driving a custom-painted Econoline van to Austin, Texas, stuffed with sound equipment, in order to host pop-up live shows throughout the week of SXSW Music Festival -- all filmed for a documentary... doesn't sound like your typical Washington, D.C. leisure activity, right?

But Austin isn't the only city dedicated to supporting and promoting local music. From folk to funk, Washington is brimming with local music talent, and venues eager to promote it. Listen Local First (LLF) is a local music initiative born in our nation's capital that is devoted to building awareness and raising the profile of D.C.'s local music scene. We seek to partner with local musicians, arts organizations, venues, and locally owned businesses to create alternate performance opportunities and new avenues for local music exploration. We consider LLF an incubator, educational tool, and a vehicle for district-wide cultural policy reform.

To build their fan base, independent artists rely on substantial local support from their communities and the exposure that many digital distribution services provide to them to actively promote their music. The two go hand in hand: by building a strong local following, artists can empower their proprietary fan base to talk up their music to their friends and family through their social networks. Creating social network buzz relies on the ability of new listeners to share the tracks and easily access an artist's music, which is what happens over digital music platforms like Spotify, Pandora, Google, Rhapsody, and Amazon, to name just a few.

But while the 21st century world of music marches forward, the 20th century is still trying to claw us back. One need look no further than the recent huge EMI deals that would give Universal Music Group over 40% of the recorded music market and would make Sony the largest music publisher in the world. Further consolidation of music labels and libraries will threaten this thriving ecosystem and cripple the vitality of the innovative digital music marketplace.

While the artists that comprise D.C.'s independent music community are not competing to get signed by major labels (at least in the short run), they rely heavily on digital distribution services to build their fan base, reach potential listeners, and sell music -- in short, they greatly depend on these services to make a living.

The majority of music artists run small businesses and do not have anywhere near the physical distribution capacity of the larger labels. Digital distribution services have to negotiate licenses with the major labels, and competition is essential for these negotiations. A major label that gains control of 40% of sound recordings would have the power to demand significantly more for its catalog and to choose, for its own purposes, the winners and losers in this market.

Without a licensing agreement from the now-largest label, a digital music service would lose traffic and advertising and become unsustainable. If these smaller digital services go under and new ones are prevented from entering the market, these artists will lose additional avenues of exposure and essentially forfeit their bargaining power for higher rates. And those services that do survive by agreeing to the higher rates would be forced to squeeze independent artists. There is only so much money to go around. If Spotify, for example, has to pay more to the majors, there will be far less financial incentives to negotiate with the smaller indie labels.

The proposed acquisitions also raise concerns about publishing rights and whether a mega label with all its market power would withdraw portions of its publishing catalog from the performance rights organizations.

We have seen this type of behavior from the labels before and there is little reason to believe that a larger label with market power would do anything but employ similar tactics. The brunt of these actions would again be borne by smaller webcasters and music streaming sites. With limited or higher-priced access to playlists, web traffic would stagnate, advertising dollars would dry up, and new programming targeted at local markets that feature independent artists would disappear.

These were some of the things on our mind as we drove down to SXSW this weekend. In Austin, from this "Mobile Music Venue", (aka, Econoline) we will showcase some of the 30-plus bands from the emerging music scene in D.C., enjoying the ability to freely distribute these sounds across multiple platforms to eager listeners.

So on behalf of local and independent musicians everywhere, we hope regulators and lawmakers in Washington will put a stop to these transactions.

Control by two behemoth labels would prevent the development of innovative new digital music distribution models, would take away avenues of exposure for independent artists, and would raise the price of digital music for consumers. These mergers would be a significant step backwards from where the industry has evolved in its efforts to establish a legitimate and dynamic digital music marketplace worth listening to.

Christopher Naoum is the co-founder of Listen Local First, a Washington, D.C. organization that aims to create stronger connections between local businesses, local venues, and local musicians. Chris served as Policy Counsel for Future of Music Coalition, Legal Research Fellow for the Benton Foundation and law clerk for a media company, and previously worked as a legal clerk in the office of Federal Communications Commissioner Jonathan Adelstein. He received his B.A. from Emory University and his J.D. and M.A. in Television Radio and Film Policy from Syracuse University.