With the announcement of Youtube’s upcoming new subscription service launch, there has come a great disturbance amongst some Indie Record Labels. These Labels that include XL, Domino, 4AD, and Cooking Vinyl, are refusing to sign an agreement they say is a “highly unfavorable [licensing] agreement.
If the Labels do not sign the agreement, Youtube would be within their rights to remove many of the labels’ videos. Videos that are at risk of being lost feature artists such as Radiohead, Adele, Vampire Weekend, Arctic Monkeys, and Jack White to name a few. This has caused organizations such as the European Independents association (IMPALA), and Feature Artists Coalition to team up and petition to prevent such a “Mass cull” from happening.
Youtube’s monetization system will also be unavailable to any label that does not sign up for the paid tier, meaning labels with such artists as Adele and Radiohead will not be compensated monetarily for their views. According to Billboard, hundreds of millions of dollars are generated yearly by the ad-supported streams for labels and publishers.
In a statement released by Youtube, the streaming juggernaut explained that only unsigned labels, in certain countries, would be blocked as part of predetermined contract agreements, and that the coalition’s accusations were simply negotiating tactics.
Tactics or not, one of the most important service the labels will be losing if they don’t agree, is Youtube’s copyright algorithms. These algorithms are used to help remove blacklisted videos, which if left up to the labels themselves, can become extremely time consuming and costly for each label.
Vevo and fan-uploaded videos along with artists signed to non-Youtube affiliated labels, and artists who own their own music, will be safe from removal. According to the International Business Times, videos may only be temporarily blocked not entirely removed, retaining all their views and other important information.
Consequences of Sound explains that artists such as Adele, who is signed to XL in the UK, and Major label Columbia, who has already signed to Youtube’s premium agreement in the U.S., may only be blocked in certain regions.
An indie distribution executive who does not have a problem with the new agreement told Billboard, “I can’t tell Spotify that I only want to be in their premium service, and not in the ad-supported part of their model. It’s just that YouTube are going backwards in building their business model.” Basically, if you signed up when it was free, you need to resign up now that there’s a version that is not free.
Another executive told Billboard that Youtube had “blundered” their negotiations. He said, “Their negotiations with indies is heavy-handed at a minimum and might be illegal at worst. YouTube and Google always do what they want, because that’s how they operate.”
Claiming that Youtube has treated them unfairly by lending preferential treatment to major labels, indie labels accuse them of undercutting fees paid to services such as Rdio, Deezer, and Spotify. The labels also claim that Youtube offers better payment percentages to Sony, Warner Bros., and Universal.
The Executive that spoke to Billboard added that if Youtube can find five publishers of a video, but not the sixth, then none of the parties are compensated, one of many ways to avoid paying the song owners.
It only makes sense that with the addition of Youtube’s premium subscription, and the expected launch of their parent company, Google’s very own streaming music service later this summer, that certain video’s would be blocked, so that consumers are not confused by which songs are free and which songs are only available to premium subscription holders.