Independent record labels behind artists like The White Stripes, Deep Purple and Arctic Monkeys announced a global deal on Saturday to pool access to their catalogs, seeking to grab a bigger share of digital music sales from the major record companies.

Indies and their trade groups from more than a dozen countries signed on to Merlin, a nonprofit licensing agency that will cut deals on their behalf with download sites and mobile services.

Smaller record companies with just a handful of successful artists fear being left behind in fast-growing digital music markets, where the majors — Universal Music, Sony/BMG, EMI and Warner Music — enjoy a clear advantage in negotiations with online retailers such as Napster and Apple Computer Inc.'s iTunes.
Indie labels account for some 80 percent of new music releases in major markets but only about 30 percent of the total revenues, according to industry data for 2005, partly because the majors spend more on marketing and have — until recently — maintained tight control over distribution channels.

Billed as a "one-stop licensing shop," Merlin will allow online stores and other digital platforms to access its members' music in one deal, rather than the thousands of separate contracts they would otherwise have to negotiate. Labels will also be able to continue selling independently through their existing distribution networks.

According to Ted Schadler, an analyst with U.S.-based Forrester Research, the licensing deal could alter the balance of power within the music industry. Providing it's backed up with efficient management of payments and distribution, it would make it viable for even the smallest labels to sell music through popular digital services by removing the cost of negotiating and managing an individual contract with each one.

"What this does is level the playing field between indies and majors," Schadler said.

Merlin already struck its first deal with digital music company Snocap, which will allow its labels' music to be sold from websites such as MySpace. The group said it would act as the "fifth major" in the world with a view to rectifying the "poor cousin" status of deals previously offered to independent labels.