Indies Jump Into Web Distrib.

LOS ANGELES-As major labels pursue a unified resolution to the distribution of music on the Internet with the Secure Digital Music Initiative (SDMI), many independent labels have seen their openings and jumped into the gap with a variety of online music offerings.
While several labels hawking their music on the Web admit that sales still have not reached significant levels, many have found the Internet to be a potent promotional tool-especially during a period in which the majors are standing to the side, embroiled in the secure-delivery debate.
Gene Rossman, president of Redwood City, Calif.-based EMusic.com-an Internet music site that offers album downloads for $8.99 and boasts exclusive contracts with 60 indie labels-notes candidly, "Revenues from digital [music] distribution aren't that high . . . but it does help [the labels'] off-line sales."
Rossman adds, "What was a nascent market is now building significantly. We see a lot more customers every day . . . It's an opportunity to find a lot of cool independent music in one place.
"The independents have a chance to make a name for themselves with the public," he continues. "You may end up seeing people being customer-loyal to independent music. You'll see more mainstream customers interested in the independent marketplace."
One proselytizer for Internet music sales is Jeff Price, president/co-owner of the New York-based indie label spinART. Following frustrating major-label distribution deals with Sony and Giant Records, spinART took its entire catalog to EMusic last August; Price now acts as a paid consultant and label recruiter for the company.
"We were the first record label to put its catalog up for sale in the MP3 platform," says Price.
He notes that there has been a surprising desire for titles that were moribund at conventional retail: "I haven't sold a physical album by [alternative act] the Barnabys in over two years, but I did double-digit sales [at EMusic] within 30 days-on a deleted album."
Price notes that promotional MP3s, like a recent Poster Children track from the album "New World Record," have made an impact. "We got 20,000 downloads in 2ƒ weeks," he says. "Is it ultimately helping our physical sales? It feels like it."
He adds, "I don't need a warehouse. I don't need to deal with returns or COD or terms . . . [The Internet] totally levels the playing field, because it cuts the majors off at the knees."
Lars Murray, director of new media at Salem, Mass.-based Rykodisc, says his company sealed a pact for MP3 downloads of some 175 album tracks with EMusic in February. "The idea was, "We gotta get in the game,' " he says. "We had to get beyond, "Who's afraid of big, bad MP3?' . . . The idea was to engage the marketplace."
Murray-who calls MP3 "the format of choice for the consumer"-views the Internet as a natural spot for the indies, who are encountering an increasingly difficult situation at brick-and-mortar retail outlets.
"The indies are always interested in gathering a larger audience for their music," he says. "The more trouble you have getting your message out, the more willing you are to try things."
Seattle-based Sub Pop Records has released tracks through MP3.com and has sold tracks via Liquid Audio. Kerry Murphy, the label's director of new media and strategic marketing, says, "Pretty much anything out there, as far as a technical platform [goes], we are willing to support it."
Murphy says that while sales of downloaded tracks have been slow, free MP3 tracks "have been grabbed up at an astounding rate . . . The audience is there-they're just not paying yet."
She adds, "[The Web] is just a tool for us to gain visibility. I am curious about how long the Big Five will sit on their SDMI haunches, because they can't forever."
One recent convert to online commerce is Champaign, Ill.-based Parasol Music, which signed an exclusive deal to release the majority of its 100-album catalog through EMusic in early June.
"We went round and round on this," says Parasol owner Jeff Merritt. "There's the school [of] wait and see, and there's the school [of] "Let's do it now.'
"It's definitely the time for all of us to do it," he continues. "I see [Internet sales] as another avenue. We may lose some [brick-and-mortar] sales, but we'll gain sales as well . . . It's a real nice way to get somebody to do a whole bunch of promotion for us."
One prominent indie label that has not yet tested the Internet sales waters is New York-based Matador Records.
The company did institute an MP3 page on its Web site in January; GM Patrick Amory says, "We decided we needed a piece of that." But to date Matador has not pacted with a firm for online sale of its tracks or titles.
"We've been somewhat cautious," Amory says. "[But] we're moving more quickly now than we did in the last six months."
Amory notes that "a company that deals mainly with catalog would be more threatened" by the security issues implicit in online distribution than a label selling mostly new releases-a view backed by Gary Tanenbaum, VP of operations for L.A.-based Del-Fi Records.
While Del-Fi-which primarily markets the back catalog of such '50s and '60s artists as Ritchie Valens and Bobby Fuller-has made its tracks available online for custom-CD manufacturing, it hasn't made its product available for MP3 downloading.
"What I don't want to do is say, "Here's 1,500 tracks, knock yourself out,' " Tanenbaum says. "It's not secure using MP3 . . . It's easier to get our stuff for free, bootlegged, than it is to get it legitimately."
While indie labels continue to announce deals with online distributors on virtually a daily basis, most observers believe that with the majors ready to step into the fray with the resolution of SDMI, the time to get into the digital game may swiftly be passing.
Rykodisc's Murray says, "I think there is a window of opportunity for the indies, if they're ready to jump and have thought it through. That said, I'm not sure that MP3 has the bang it did six months ago."