Changes are afoot in the music industry and the outcome may be that the "little guys" come to the fore.

Digital music distributor, OD2 founder and former Genesis frontman Peter Gabriel has set up Mudda, a union of digitally downloading artists, with musician and producer Brian Eno. He told CNN: "The theory is that artists could become their own distributors, almost certainly with their record companies, but they can deliver stuff independently if they want.

"What I'm afraid of is that every time there is a technological breakthrough the music business will think: 'Ah, here we have another chance to claw a big chunk of the cake back for the business and away from the artist.' And I think it's really important that artists act together – which we are notoriously bad at doing – and I hope that this union idea may get some blood behind it, and we will be able to become our own retailers in part.

"I think it's very important for artists to get involved in the digital distribution of music. A new world is being created – one is dying – and if artists don't get involved, they're going to get screwed, like they usually do.

"There are deals being done now where the independents are going to get screwed again, I think. It's only by staying together, and consolidating as a lump, that has some leverage and some power, that the little guy can have a chance to compete."

While Gabriel insists that the intention of the Mudda initiative is not to set up something in opposition to the record companies, he does admit: "I think there will be more of a power balance, I just think people in record companies now are a lot more willing to consider power-sharing deals."

He explains: "What I fundamentally believe is that the relationship should be a partnership. It shouldn't be 'we own you therefore we do what we want with your work.' Those days should be gone, and if artists aren't smart enough to get off their arses and change that now, then we deserve what we get, because we have the opportunity to change that."

Gabriel also has praise for Apple. "They've successfully made the iPod into the product every young person or music fan wants to have. It's been a tremendous boost, I think, for the digital music world, and I'm very pleased for that."