MTV Accused of Bullying Europe’s Indie Labels

It appears that just as the image maker giveth, the image maker can also taketh away. In a business where the visual product is as important as the musical one, music television giant MTV is threatening to stop artists belonging to European independent record labels from appearing on its channels.

In a move that effectively holds the record companies hostage over airtime available to their artists, MTV Networks Europe has told the independent labels, which are responsible for 22 percent of the European music market, that videos by such artists as soul singer Craig David, techno monsters The Prodigy and rockers The White Stripes may be cut from the screens unless the labels sign a deal that halves their payments for the music.

"Bully boy" tactics

The ultimatum has caused the record labels to accuse MTV, which is owned by American firm Viacom, of "bully boy tactics" in its attempts at trying to force them into signing a deal directly with the music channel. Such negotiations are usually conducted through the bargaining group Video Performance Limited (VPL), which has already rejected MTV’s planned five-year deal that would be worth €122,700 ($153,900) a year spread between thousands of European record labels. The previous deal was worth €2.7 million.

"The new deal calls for more rights and more TV channels for 55 percent less than we are currently getting, and usage has increased over the past five years anyway," said Alison Wenham, the chairman of the Association of Independent Music in the UK in an interview in Thursday’s Guardian newspaper.

More content for less money

The labels are arguing that MTV is asking for more of their product while paying lower fees. Some have also claimed that appearing on TV channels is no longer a strong promotional tool for their artists but instead is contributing to a slump in record sales. Sean O'Brien, the chairman of Telstar, to which Craig David (picture) is signed, said that the previous deal only left his company with about €1,400 a year for a few million pounds worth of programming.

"MTV was not paying anything like a market rate, even if you look at what they used to pay," he told The Guardian. "There is no doubt that increasing access to music TV is diminishing the appetite to buy singles."

Euro labels get good deal, says MTV

An MTV spokesperson said that European labels had been paid more than its average global record label. "We found that we were paying double the rate that we were paying other rate holders."

"If we have made anyone feel threatened, it was hugely unintentional. We wouldn't have spent an extra year trying to come to an agreement with VPL if we didn't care. We don't want to knock anyone off the network."