As has been widely reported, the UK’s largest independent entertainment distributor, PIAS, suffered the complete loss of stock in an enormous warehouse in North London amidst rioting in the neighborhood. Impacted is stock not only in music, but independent film, too. The warehouse is owned by Sony DADC, but the impacted stock is owned by distributor PIAS and covers some 150 record labels (see list below), from big names to tiny – and more vulnerable – outlets.

While details on insurance coverage and timing are largely forthcoming, the more urgent problem is that – insurance payments or no – the loss of significant portions or even all stock for many smaller record labels impacts their ability to operate. Because producing something like a CD or vinyl requires manufacturing, lead time, and shipping logistics, the event could have a devastatingly constraining effect on the ability of these labels to sell physical music.

Some relevant coverage:

Independent music labels left ‘devastated’ by riot fire [BBC Radio 1 Newsbeat]

Sony/PIAS Warehouse Burnt Down in UK Riots [Pitchfork]

Sony: London warehouse fire may affect UK deliveries [Reuters]

Independent record labels fear ruinous stock loss in London riots fire [The Guardian]

On the film side: British film distributors left reeling by financial impact of Sony/PIAS warehouse fire [The Guardian]

Via Twitter, Rough Trade Shops are following events and encouraging volunteers to work on cleanup and fundraising efforts. The focus remains on the immediate safety of artists and staff, naturally, for all London’s arts institutions, and thankfully, while the loss of physical music was devastating, no injuries were reported.

Here’s the latest update from PIAS, as of Tuesday pm:

Latest update – Sony DADC have actioned their Business Continuity Plan and are back up and running from a new control room in Enfield. PIAS continue to work with them to minimise the impact on the business, a number one priority for all our labels and clients. Sony DADC have identified a temporary distribution partner and it is envisaged that they will be in a position to pick, pack and ship orders in the course of next week.

This follows an earlier statement regarding a fire last night at the SonyDADC warehouse, which services the physical distribution for PIAS in the UK and Ireland. PIAS’s UK offices in London and all other areas of our business are unaffected.

Further details will follow tomorrow morning, Wednesday.

We wish to thank everyone for the overwhelming messages of support.

Follow PIAS directly for the latest official statements:
http://www.pias.com/pias/

Benefit plans are thus far mostly at a placeholder status, but there’s reason to believe that the future of a number of the UK’s record labels could be endangered by events.

In addition to a direct fund, simply buying digital releases from these labels could help – and illustrates that having digital revenues can be a way to resist catastrophic problems elsewhere.
AIM urges fans to buy digital and help out indies affected by warehouse fire [MusicWeek]

Our friend TRICIL is already using the Topspin platform in order to give away his entire 47-track discography in exchange for a donation that will support the recovery of these labels.

http://tricil.net/

Some of those record labels:

LABEL NAME
[PIAS] Recordings
[PIAS] Recordings Belgium
4AD
A Camp
Absynthe Minded
Accidental
AEI Music
Air Recordings
ALC Music
Alsation
Ambush Reality
Ancient & Modern
Angular Recording Corporation
Arcady Records
Ark Recordings
Asthmatic Kitty Records
Atlantic Jaxx Recordings
Bad Magic
Balling The Jack
Banquet Records
Battered Ornaments Records
Beggars Banquet
Best Before
Big Brother
Big Dada
Bird Records
blackmaps
Bloody Chamber
Blowout Music
Blue Chopsticks
Border Community
Borstal Beats
Boysnoize Records
BPM
Brainfeeder
Brassland
Bright Star Recordings
Brille
Broken Sound Music
Bronzerat
Brothers and Sisters
Brownswood Recordings
Buzzin’ Fly
Cache Cache
Cadenza Records
Celluloid Records
Chalkmark / IE
Chemikal Underground Records
Cocoon
Control Tower
Counter Records
Dance To The Radio
Dead Oceans
Deceptive
Defenders Ent UK
DESOLAT
Dessous
Different
Dirtee Stank
Divine Comedy Records
Domino Records
Double Six Records
Drag City
Dreambrother
Drive Thru Records
Drowned In Sound
Dummy Records
Duophonic
Eat Sleep Records
Fabric Worldwide
Fake Diamonds
FantasyTrashcan
Fatcat Records
Fence
Feraltone
Finders Keepers Records
Flock Music
Flying Circus
Freerange Records
Friends Vs Records
Full Pupp
Full Time Hobby
Gang Of Four Recordings
Geographic
Ghost Ship
Glaze Recordings
Groenland Records
G-Unit
Hardly Art
Hassle Records
Helpless
Hem Hem Records
HFN Music
Immune
Independiente
Infant
Infectious
Jagjaguwar
Kartel
Kitchenware
Kitsune
KMS Records / Fabric
Laughing Stock
Lex Records
Lipservice
Little Sister Recordings
LO-MAX Records
Loose Music
Lovepump United
Low Life Records
Lucky Number Music
Lucky Seven Records
Mantra
Matador
Memphis Industries
Merok
Metric Music International
Metroline Limited
Model Citizen
Moikai
Motion Audio
MyMajorLabel Ltd
Nation
Ninja Tune
No Quarter
NovaMute
Nusic Sounds
One Four Seven Records Ltd
One Little Indian
Organs
Outcaste
OVNI
P.I.L.
Peartree Records
PeMa
People In The Sky
People Tree
Pirates Blend Records Inc
Planet Function
Play It Again Sam
Playlouder
Poker Flat
Polyvinyl Records
Poseidon Records
Post Present
Pschent
Raw Canvas
Red Cord Records
REK’D
Rekids
Rekords Rekords
Renaissance
Reveal Records
Riverman Records
Rock Action Records
Roots Records
Rough Trade Records
Rubyworks
Sea Note
Search and Destroy
Secretly Canadian
Setanta
Shape
SideOneDummy Records
Silva Screen
Slam Dunk Records
Smekkleysa
Soma
Sonic Cathedral
Soul Jazz Records
South Paw
Southern Fried Records
Stereo Bang Media
Stolen Recordings
Stranger Records
Streamline
Sub Pop
Suicide Squeeze
Sunday Best
Thrill Jockey
Tirk
Too Pure
Torque Records
Touch & Go Records
Transmission Recordings
Tri Tone
Trouble Records
True Panther
Try Harder
Turnstile
Twisted Nerve Recordings
Universal Sound
Victory Records
Wagram
Wall of Sound
Warp
Watergate
We Love You
Wiiija
Willkommen Records Ltd
Wonderfulsound
XL
Xtra Mile Recordings
Yaala Yaala
Young Turks

PIAS also shares music on SoundCloud:

Latest tracks by PIAS Entertainment

Updated: Wednesday Statement from PIAS

Kenny Gates, PIAS’ Founder & CEO, posts an updated message today. He notes that all PIAS staff are okay, and reiterates that SONY DADC, not PIAS, actually owns the warehouse; PIAS contracts with SONY in order to house their product for distribution.

As you have noticed in our last note , Sony DADC have been remarkably quick and efficient to put together a contingency plan that should allow us to ship to stores sometime next week. We are impressed by their efficiency and that is good news.

These times are difficult for us, our artists, our labels and the whole indie sector which we vastly represent but we are determined to come out of this setback in the best way possible.

The PIAS team has been working around the clock to limit the damage . We know that the livelihood of many talented, passionate and hard working music people, artists and small and bigger labels is at stake and depend on our actions and those of Sony DADC.

We have been getting a lot of words of support and offers of help and that truly helps.

Thank you to everybody who cares and supports PIAS and the indie sector.

Read the full statement:
http://www.pias.com/pias/message-from-kenny-gates

CDM has gotten no further word on efforts to support the labels, so our view is that the best course of action is to wait on additional information.

Updated: Answers on Fundraising Efforts from Organizers

Representatives of Label Love have answered CDM questions and explained why labels are in need, how fundraising efforts are working, and what you might do to help:
In Wake of London Fire, Organizers Answers Questions About Supporting Indie Labels [CDM]

We’ll be watching Apple’s developer conference closely to try to understand the implications of a likely announcement of an Apple cloud music service for artists. While Google and Amazon are already testing those waters, Apple’s dominance of the software player (iTunes) and mobile players (iPod, iPhone) give it arguably greater weight.

We should know more after the official announcement, but early reports suggest independent labels (to say nothing of unsigned artists) may have reason for concern. I think it’ll make more sense to analyze this once some of the secrecy is lifted, but one group has already made a statement even before that announcement, indicating the level of scrutiny today’s keynote is likely to gather. The “fifth major,” the largest representative of independent labels, is already concerned about even the possibility of a cloud that would favor major labels:

In response to media speculation that independent labels are being offered a discriminatory licensing deal for the new iCloud service, Charles Caldas, CEO independents’ rights agency Merlin says:
“As the most experienced player in the digital music space, Apple should have the deepest understanding of the significant value that independents bring to their business. In light of this I would be very surprised and extremely disappointed if Apple were not going to ensure that independent rights holders are properly and fairly remunerated on the iCloud service.”
Merlin is unable to comment on any aspect of the negotiations, which given Apple’s position running the world’s longest-standing digital music service, with existing deals with the vast majority of the world’s right holders, are a matter between Apple and its licensees.

Merlin is a big player in this landscape, not just someone looking for attention on an Apple launch day. As they describe themselves: “Merlin, the virtual fifth major, represents the world’s most important set of independent music rights. Merlin seeks to ensure its members have effective access to new and emerging revenue streams and that their rights are appropriately valued and protected.”
http://merlinnetwork.org/

I believe interested artists and music lovers may want to pay attention to a number of issues with cloud services from Apple and others:

• Major/minor cadence. Will majors get better deals than minors, in licensing, exposure, compatibility, or other areas? The cloud could level the playing field in some of the ways digital music has generally, but we have yet to see if it’s a step forward, backwards, or sideways.
• Licensing. How will a cloud service track plays? Who will it play for those plays?
• Fidelity. With mobile networks under heavy bandwidth concerns, what will the quality of streams be? How easy will it be to sync a higher-quality file to a device, and what will the quality and format of that device be?
• Ease of sync. Will there be new layers of DRM associated with the synced file?
• Distribution. Will cloud services work with files you’ve purchased direct from artists (on services like Topspin and Bandcamp)? From independent stores (Beatport, Bleep, and the like)? From CDs (or vinyl) you’ve ripped? Or will they tend to favor the store from which you purchased those files (iTunes, Amazon)? (Google, for instance, syncs your entire iTunes library regardless.)
• Interoperability. To put this bluntly, “does this mean I have to buy stuff from Apple just to make it work in the cloud”? See also proprietary chipsets in playback devices: Apple’s AirPlay for local wireless even requires a chip to authenticate the validity of the stream, which could be seen as a kind of wireless DRM.
• The open Web. Looking at interoperability on a Web front, will we see open APIs for working with these services? I was contacted by a number of people who were disappointed when Google didn’t talk about adding an API to their cloud service – particularly since they unveiled it, as Apple is likely to do today, at a developer conference.

So there’s my checklist; if you have ideas of your own, feel free to add them in comments. Why be concerned about these issues? Ironically, many existing Web services have begun to address these questions, though sometimes with questionable legality.

Updated – I compared these questions against what we got. Apple deserves credit for making the design of the service efficient; the situation just remains complicated by multiple vendors and platforms, and a lack of Web interoperability in all of these services (compared to the level of innovation from Web-based startups).

How’d Apple’s Cloud Do? Four Questions Answered.

The sum total of the flexibility, fairness, and openness of these services could also have a significant impact on independent artists and labels, and the ability to support a diverse range of music. That’s not to say that, absent these factors, the effect will immediately be negative – only that they’re areas of interest.

TuneCore is promising snap reaction immediately after the keynote, which might provide a clue into how unsigned artists would get on the service; I hope to follow up with Merlin, as well.

More reading in advance of Apple’s keynote:
Apple’s iCloud Will Scan, But How Much Will It Match? [Digital Audio Insider]
Storms Ahead for “Cloud” Music? [Future of Music Coalition, speaking largely about concerns and disappointments with Amazon and Google]
Digital Music News has been dutifully covering Apple behind-the-scenes as they reportedly sign a number of major labels – and raising red flags that the service may favor those labels. Unfortunately, that site is down as I write this.

DMN is back up. Read, for instance:
Uh-Oh: iCloud Has All the Markings of Another Indie Shaft…

Merlin is part of the negotiations and are unhappy about how they’re being treated. But note that the issues I raise above go beyond just the licensing questions, to the issue of how music is distributed and consumed in generally. And that may prove to be bad news for “artists who aren’t Lady Gaga,” too.

slotMusic.org | Press Release

See also GearLog, which notes that SanDisk previously did a free promotional SD of music

Wired News asks, “but why?”, to which I’d answer – it might well be easier to load music onto a phone in parts of the world other than the US, you might more easily distribute videos, and artists looking to increase the value of their CDs could innovate on revitalizing album art.

First, let’s start with the players, as that’s basically the big news here.

Hardware: SanDisk, the folks who invented flash storage and make more of it than anyone else

Labels: A huge set of the majors – EMI Music (which includes the likes of Angel, Capitol, Blue Note, and Astrelwerks), Sony BMG, Warner Music (including Atlantic, Nonesuch, Rhino), and the world’s biggest music company, Universal Music Group

Retailers: Best Buy, Wal-Mart, and other US retailers, with Europe to follow – keeping in mind, Wal-Mart remains the biggest brick-and-mortar seller in the US

When it’s happening: Exact date TBA, but officially by the holidays

Which artists: Most likely, lots of them. An EMI representative who spoke with CDM confirmed two chart-topping examples: Coldplay’s Viva la Vida and Kate Perry’s One of the Boys.

Now, you’d be right to be skeptical of how this format will be received, but it’s certainly a big distribution play with that arrangement of labels and retailers.

The hardware in question is basically SanDisk’s tiny removable flash memory format microSD, rebranded and repackaged as slotMusic. (A representative of SanDisk tells us there are some other subtle technological differences; more on that soon.) The important thing about this is that the hardware you buy has no DRM on it at all; it’s just standard flash memory you can plug into phones and mobile devices, or, via a tiny included USB sleeve, a computer.

SanDisk’s format specifies DRM-free, 320 kpbs MP3s as the music format. Gruvi, SanDisk’s previous attempt at turning their lucrative flash memory business into a music format was a miserable failure, but by contrast, it was locked with DRM features and, excepting a big release by the Rolling Stones, lacked support from labels and retailers. (I see Gruvi has even been largely erased from SanDisk’s website.)

What’s the Business Angle?

My colleague Eoin Rossney sent me this story under a headline on Ireland’s SiliconRepublic.com that screams “SanDisk and big labels in tech deal that could save the music business.” That’s obviously hyperbolic, but it’s also wrong. To me, it seems to be about three things:

1. It’s an experiment. Music labels want their music everywhere they can get it – as, frankly, they should; that’s their job.

2. It’s a massive end run around iTunes. Remember, part of what helped prompt some of the more stubborn labels to remove DRM was the realization that their DRM deal with Apple had placed Apple in the position of dominating download sales for the device most people owned.

3. Most phones aren’t iPhones. Labels will continue to do business with iTunes because iTunes is selling their music – but they’d be nuts to turn their back on the rest of the mobile phone market, which is far bigger. The press release notes 1.2 billion phones are due to ship this year, a number Apple can’t approach even with all their iPods and iPhones put together. In fact, it’s hard to wonder if, on a global scale, iPod won’t slip into the shadows with the number of increasingly multimedia-savvy phones out there.

Despite the hip factor of the iPhone, Apple has a tiny slice of an exploding global market for mobile devices. Instead of using a cable and a fancy vendor-specific store, you can just give people music they can pop directly into their phone, which – from vendors other than Apple – typically has a microSD slot. And as I noted last week, Apple’s alternative is a store/software sync arrangement that they control exclusively.

Music Everywhere, and Back on Objects

I’m not sure slotSD will be the “new CD,” or that it even needs to be. I think it’s better to see this as one of a variety of options you’ll see for music distribution. And, of course, even slotSD is best understood in the context of a growing amount of music showing up on flash memory, because it combines the flexibility of digital formats with physical objects.

“This is one of many initiatives to make our music available in as many different forms as possible,” Jeanne Meyer of EMI Music tells CDM. “Our big MO is to experiment with as many as possible.”

EMI, for one, has a record of trying just this sort of thing. There was a re-release of Radiohead’s studio albums on memory stick, though that seemed to cause some controversy. EMI has even toyed with big retail, with a release of UK superstar Robbie Williams at England’s own big box, The Carphone Warehouse. (It’d be interesting to know what sales were like.)

Of course, you can easily download files. Physical media is all about the object. A SanDisk representative confirms that labels are planning physical liner notes and album art in the package. You can also expect the memory to be loaded with digital extras, in the form of artwork, videos, and the like. Given the middling quality of online video, and the fact that bandwidth costs aren’t going down at the rate many had hoped, I think that could mean higher quality and more access to video via physical formats than online.

Indie Artists and Digital Contents

So, I imagine for many of you not on Sony BMG, and listening to many artists who aren’t, this won’t be terribly earth-shaking news. But I do know SanDisk reassures CDM that they have worked with indies in the past on various promotional projects.

What can artists do with a format like this? Well, they can load it up with goodies that might actually be otherwise rack up bandwidth costs. One excellent example of an artist experimenting with this format is Sound Tribe Sector 9. They sent their latest release, Peaceblaster, to me. It’s loaded up not only with the files for the album, but extra images, podcasts, a screensaver, and videos. We saw these kinds of extras squeezed onto CDs at one point via formats like Enhanced CD, but there’s no question it’s more convenient on USB stick.

I think the big challenge will be how to make these contents interesting and unique, and even with bandwidth costs comparing unfavorably against increasingly high-definition media, how to compete with online alternatives.

Somehow, I imagine the slotMusic format winding up being a plain-vanilla blister pack that, stuck in a dull music department in Best Buy, just confuses consumers. I’m happy to be proven wrong there. But there is, in the meantime, plenty of room for independent artists and labels to innovate with short-run releases and ideas for what to pack inside the digital media that no one has thought of yet. And while majors have earned the skepticism of consumers and artists alike, I wouldn’t be surprised to see majors being more adventurous – especially once they discover that, in addition to the perils digital media pose, there could be a significant profit payoff for those experiments.

Actually, forget everything I’ve said in this entire article, and let me sum it up in one line:

If physical distribution brings art back to album releases, it’s a good thing, and it’ll work.

The generation of music lovers staring into album art wasn’t wrong.