Framing the debate: Youtube vs Indie Labels

YouTube, the land of video streaming that leads you through a path of satisfying, and possibly weird videos until you finally find yourself watching cats in costumes. Not only is YouTube filled with funny, yet disturbing videos, but it is also a gateway to listen to music freely. The music ranges from famous artists, to independent artists, to song covers, and to kids posting videos showing their musical talents to the world. As YouTube develops, so does parts of the music industry. YouTube has developed their own ad free music streaming subscription service called YouTube Red. Since then, issues about contracts have been brought up about whether or not indie labels are being treated fairly compared to bigger labels. This is lead to YouTube threatening to remove/block indie labels from their service.

The licensing deals over the service are contentious, as independent labels accuse YouTube of forcing them into lower rates. With YouTube new service, rates have been exposed and it seems that indie labels aren’t being as equitably by YouTube as supposed to Spotify, Rdio, Rhapsody, and other services. WIN, a global trade body representing independent music labels, has negotiated with YouTube accused of giving major record labels, such as Universal and Sony the same lower rates — but accepting larger advances or other significant payments from the big companies to make up the difference. With that, indie labels have refused to sign YouTube’s contract. WIN organized a press conference to ramp up its protests. Its chairman, Alison Wenham, said this at the event:

“We understand that YouTube are still, despite our intervention and despite some very trenchant conversations between YouTube and myself, still threatening to block independent content from the YouTube platform if those independent labels do not sign the contract.”

YouTube, on the other hand, finds the accusations to be completely false. YouTube wants labels to make their music available to stream on both its premium and free services while setting them all to have ads shown in and around them. That could be problematic for artists who want to withhold their music from YouTube. So it’s said that any withdrawn content would affect just 5 percent of the company’s label partners, mostly outside the U.S. They also point to a report that one indie label has enthusiastically agreed to the deal and declares it identical to that of larger labels. Due to the resistance of indie labels to sign, YouTube gave an insight of their plans in an interview with the Financial Times stating:

“The Google-owned company will start blocking videos “in a matter of days” to ensure that all content on the new platform is governed by its new contractual terms, said Robert Kyncl, YouTube’s head of content and business operations.”

The issue brought up by independent labels seems to center on how much YouTube is willing to pay labels under the new service terms for streams of music that are free. The growing concern is over that YouTube is giving more royalty weight to music played in the paid tier, and therefore offering less of a payout for the free plays — but to YouTube they are trying to add more enhancements to the free tier in order to compete against the Spotify and other streaming services.

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