Europe's indie labels have teamed-up to form a global licensing agency, Merlin, which wil license indie repertoire.

Merlin is a one-stop service that licenses indie repertoire for Web 2.0 companies, such as YouTube or MySpace.

Indie labels are responsible for artists including The White Stripes, Arctic Monkeys, Tom Waits, The Pixies, De La Soul and Cat Power.

The indies hope that Merlin will help them compete more equally with the ever-dominant four surviving major labels.

Merlin launches with a deal with Snocap, which has developed its MyStore system, which will debut soon on MySpace. Labels can use the service to sell their music over MySpace, a well as other music websites. MyStores can be dropped in to any website.

Indie labels will get paid, as will the artists, and songs will be made available in unprotected MP3 format, meaning they will play on iPods.

Merlin is to be led by CEO Charles Caldas, who said: “The form of copyright apartheid currently being applied to the value of independent rights is unacceptable. Merlin will enable independents around the world to participate in new licensing and revenue models on competitive terms and give new services more direct access to their repertoire. Together we are bigger than the largest major.”

Alison Wenham, president of the World Independent Network said: “Independents will now achieve parity with each other and with the majors in getting a fair share of the revenues now being generated by new business models."