That Robert Levine spends two pages talking about digital distribution without mentioning the runaway success of CDBaby boggles the mind.
However, the article does frame up the interesting position that the Orchard has taken. Instead of focusing on the onesy-twosy market of independent musicians that CDBaby handles very well, the Orchard acquires digital distro rights from mostly overseas labels with thousands of back catalog titles.
They're banking that they'll catch the "long tail" on digital downloads of obscure releases -- yet they still have to sidestep the rocky relationships they built with many American indie musicians during their previous incarnation as a supplier to one-stop physical distributors.
Even the NYT piece acknowledges that -- despite their best intentions -- they became notorious for missing scheduled payments to artists. Even worse, and unmentioned, was the fact that they traded on the expectations of artists that thought they'd start seeing (and selling) copies of their albums in local record shops just by paying $99.
Focusing on relationships with small to medium labels certainly can help them survive the roiling of the music industry, as J.D. Lasica suggests, but there's still a lot of damage control to be done among a music community with a long tail for bitter memories.