The group, called Merlin, was launched at the annual MidemNet music industry conference with its backers saying it would become the "fifth major" in the industry.

The launch follows the rapid growth in popularity of sites like YouTube, where fans post video clips carrying their choice of music without permission from copyright holders.

The independent record label sector makes up for 30 percent of the music sold worldwide, with the rest from the four majors -- Vivendi's Universal Music, Sony BMG, EMI Group and Warner Music.

The group said it would aim to rectify the "poor cousin" status of deals previously offered to independent labels and will address the "growing assumption that, for emerging media, only the four majors need to be licensed, with the rest free to air."

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