Indie record labels are refusing to get on board with YouTube's forthcoming streaming subscription service, claiming the terms of YouTube's deal favor major record labels. And now these indie labels have some backup.
YouTube, which is owned by Google, has become a massive online source for streaming free music and has more than 1 billion visitors per month. The company recently reached an agreement with major rights holders that would make ad-free music available to consumers for a fee. Last week, after a number of indie labels came out against plans for a premium YouTube service, YouTube announced that "in a matter of days" it would blacklist artists and record labels refusing to sign on.
The Music Producers Guild, a membership-based group of industry producers and engineers, released a statement on June 20, lambasting Google's subscription model and the company's treatment of indie labels.
From the statement:
With regards to the recent dispute between YouTube and independent labels and the unfavourable terms which You[T]ube seeks, without negotiation, to impose upon independent record labels, the Music Producers Guild is deeply concerned about Google’s apparent abuse of its monopoly and associated market power and the adverse affect this will have on the wider industry and funds available for innovative and creative content production in the future.
A YouTube spokesperson previously told The Huffington Post that of all the music labels which had previously inked deals with YouTube to share in ad revenue, only 5 percent have yet to sign on with the new ad-free, subscription-based service.
Robert Kyncl, YouTube’s head of content and business operations told the Financial Times, “We’re paying them [indie labels] fairly and consistently with the industry,” but he did not disclose the terms of the deals.
Independent labels together account for roughly a third of the music industry's market share and represent artists including Adele, The White Stripes and Vampire Weekend.
YouTube has yet to begin removing content owned by labels that did not agree to the ad-free premium deal.