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The new MySpace Music joint venture may represent a step forward for the three participating major labels, but the deal hits a sour note for some in the independent music community. Hypebot, a music and tech industry blog, noted yesterday that CEO Greg Scholl of digital music distributor The Orchard Enterprises Inc. [ORCD] sent an e-mail to independent artists and labels lamenting the lack of an equity offer to indies in the new arrangement and promising to share any equity it receives in any deal it may negotiate with MySpace Music.

Brian Zisk, co-founder of advocacy group The Future of Music Coalition, agrees that independent artists and labels have reason to resent MySpace Music. "MySpace built its business on indies, then decided it could make more money on the vast majority of the market which is controlled by majors," he said. "They cashed out on their acquisition [by MySpace parent News Corp.], then turned their back on the folks that got them there."

MySpace claims to provide pages for 5 million artists, the vast majority of whom are unsigned and independent. One of the social network's initial draws was its music content, and indie bands embraced the site's easy song distribution and capacity for generating publicity.

The Orchard is majority-owned by JDS Capital's Dimensional Associates LLC unit, where Scholl is a managing director. Interestingly, Dimensional also controls downloadable music retailer eMusic.com Inc., a haven for indie artists and labels. Since eMusic's subscription model prices DRM-free songs at well below $1 apiece--usually around 30 cents--the major labels have declined participation, essentially creating an online equivalent of a specialized indie record store with a deep catalog. MySpace's initiative presents a direct hit on eMusic, capturing the long tail of music and offering DRM-free downloads, although it may not be able to offer the same price point as eMusic.

Of course, it's worth noting that private equity firms aren't exactly known for championing the interests of independent artists. Yet Dimensional now finds itself with a reason to do so: It controls two indie-friendly businesses that will soon compete directly with a new behemoth owned by News Corp. and major labels. By advocating fair treatment of independent bands and labels and stoking animosity toward MySpace Music, Scholl may also be lining up Dimensional's interests in that long tail. -- Paul Bonanos

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