The most important story transpiring in the music business this week is taking place in Canada.  Where first the indie labels and now the artists are in REVOLT!  Not against their customers, but CRIA, the north of the border equivalent of the RIAA.

CRIA was cozying up to legislators, with a worldwide agenda that didn’t square with that of indie labels.  So, they all resigned from the organization.  Then the artists formed an organization, the Canadian Music Creators Coalition, and stated the obvious.  Not only that suing consumers and DRM are backward and harmful, but that the CRIA companies, the major labels, weren’t even SUPPORTING CANADIAN MUSIC!  A New Voice

You’d think this would be a tempest in a teapot, except for one thing.  A legislator running for office was found with her hand in the cookie jar.  Taking money from CRIA.  Word got out and she was BLOWN OUT!  As in she failed to be reelected.  And if you think lawmakers are now gonna take CRIA’s side, to quote Judas Priest, you’ve got another thing coming.

Now you might be pissed that the rapers and pillagers of Warner Music are going to almost DOUBLE their money in a couple of short years.  Yup, the purchase price being bandied about is $5 billion.  EMI Holds New Talks for Rival  But although Edgar Bronfman, Jr. is finally going to look good in the eyes of his family, the real story is the eroding power of the major labels.

That’s why this merger is happening.  Warner and EMI can’t compete with Universal.  They’re both music-only companies.  One day the stock market is going to wake up to their sad state and their stock is going to tank, and never recover.  So, you try to achieve critical mass with this merger, and get numerous tax/accounting benefits in the process.  Yup, you can massage the numbers to the point where the REAL status of the combined company, which won’t be good, won’t be known for years, after the mercenary men running the enterprise have pocketed more millions.

Oh, we could speak of the divestment of publishing assets.  And regulatory review.  But those aren’t problems.  Publishing will survive in the new era.  Because there’s very little investment necessary.  And the companies’ critical mass is appealing to writers who find it cumbersome to administer their own rights, especially when publishers will now let them get their works back in a few years.  And the Mario Monti era is over.  This merger sails through.  And then in a world of ever-increasing distribution and exposure outlets we’re down to three, ever-shrinking, major labels.

You’ve seen this play out before.  They don’t add employees.  They don’t sign MORE artists.  All they do is cut back.  When majors controlled radio, and that was the only game in town, it didn’t matter.  But now with only a small percentage of the acts extant on majors, and very few employees at the labels to work them, and so many places to get them started, it’s like defending a country with three huge tanks.  You need more men in the field.  You need infrastructure.  And all you’ve got is gutted enterprises.

The movie is unspooling so slowly that many don’t see the big picture, they’re missing the plot.

Turns out closing down Napster was the worst thing the majors could do.  They could have been paid for traded files for almost six years now.  Music acquisition would not have been driven further underground, where it can’t be tracked.  Scared of losing their distribution stranglehold, not only did the majors leave money on the table, they prevented new acts from being broken, for there was nowhere to HEAR them.

So, like a guerilla army, individuals crept in.  Via the Net.  Via MySpace.  With the threshold for entry into the game so low, insurgents poured over the border.  Sure, most of them suck.  But not everybody is a leader, not everybody is a winner.  But it’s going to be death by a thousand paper cuts.  So many of these people would NEVER sign with a behemoth, and one day, a few of them are going to break big, and it’s end game for the monoliths.

I’m not absolutely sure the majors’ cartel could have been saved.  But they could have given it a good shot.  Instead of dipping their toes in the water, they could have embraced the future, made new non-heinous deals, given smaller advances, tried to sign and distribute and pay all the small bands.  But, through sheer ignorance, through sheer hubris, they missed the future COMPLETELY!

Further testimony to the loss of the majors’ power is the iTunes debacle.  They saber-rattled, in PUBLIC, that they needed variable pricing at the iTMS.  But they lost.  God, at what cost.  Their image took a hit and they didn’t even get more money.  Steve Jobs isn’t afraid of the record companies.  Like a better Bono, all he has to do is take his story to the public, and the public sides with HIM!  Which people did when he labeled the majors greedy.

These guys are against the ropes.  And although their figurehead Mitch Bainwol gives the illusion they’re fighting, the wind is coming out of their sails, they’re going to slip through the ropes, they’re gonna disappear.

And a new Bill Gates-type figure is going to step into the void.  Someone just as mercenary as they are, but who UNDERSTANDS the new marketplace.