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What's That Sound? Probably an Indie Label

But that inclination of major labels to strike deals with the indies is evidence itself of the shifting landscape. While the old guard still controls the playlist on FM radio, the playing field for new listeners online has been effectively leveled by a proliferation of services and tools easily available to emerging artists.

One of the most important of those has been streaming radio service Pandora (P - Get Report).

A decade ago, Bengloff said, independents faced major obstacles trying to reach fans. Radio's limited airtime was dominated by the big name acts; likewise, retail outlets had limited space and advertising was prohibitively expensive.

"For the most part radio was problematic," Bengloff said. "There were barriers. Retailers, you had to buy your way in for cooperative advertising. So for both promotion and monetization we had those barriers to entry."

Enter Pandora.

"We saw them as a democracy that was going to allow us to have access," Bengloff said. "They treat you more than fairly. They realize that independent music is the lifeblood."

According to a Pandora representative, a full 70% of the company's streaming catalog right now is independent artists. An A2IM report states indies make up 40% of Pandora's streaming.

The success of those efforts has rattled the rusty cages of the broadcast industry, illustrated by a lawsuit file against Pandora by BMI, the subject of a recent analysis by TheStreet's Rocco Pendola. In brief, Pandora is trying to pay the same lower royalties rate that radio broadcasters pay. Performance rights organization BMI, which has a board made up mostly of older print, TV and radio executives and no one from the Internet or streaming media sector, claims that's unfair.

"Gotta love good old boys' clubs," Pendola writes.

ASCAP, the other major performance rights organization, which has actual musicians and composers on its board, is also opposed to Pandora's royalties plan, fearing that its members will be paid even less than they are now.

In both cases, those concerns appear ill-founded. If current trends continue, Pandora and other similar services stand to put considerably more money into both musicians and broadcasters pockets, by offering a much wider selection of music with a greater frequency and with far more precise listener statistics.

According to Bengloff, Pandora has been working closely with independents, putting them at the "front of the line." That cooperation helps swing the musical culture door wide open.

"People want music discoveries," he said. "They want new things."

Independents can provide that experience and, with newfound social media power and statistics provided by places like Pandora, place it more consistently into the context of people's small social circles.
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