Indie Labels’ Side

A goal of indie labels is to be treated as equal — equal as in compared to major label companies. But with YouTube’s launch of YouTube Music, it isn’t helping them much. YouTube Music was created to compete with other music streaming services, including Spotify, Apple Music, and others. With that, YouTube had to create a contract for labels to sign allowing the labels’ artists’ music to be played with the ad-free service. The contract was reviewed and many labels signed, except for a vast majority of indie labels.

WIN, the Worldwide Independent Network, felt that the contract was unfair due to multiple reasons and demanded negotiation. Instead, YouTube threatened that any label who did not want to agree to participate in YouTube Music will have their artists’ channels and videos set to ‘private’ or even removed. Artists including Adele, Arctic Monkeys and Jack White could see their videos taken down. Supporters on the side of indie labels agree that YouTube is being unfair and inconsiderate of the importance of the indie scene.

As YouTube believes that indie artists don’t contribute a lot in the market, WIN’s chief executive Alison Wenham was very forward in her response. “They have suffered a simple but catastrophic error of judgement in misreading the market,” said Wenham. WIN claims that the company has signed remunerative deals with major labels, such as Universal, Warner and Sony, while demanding that independent labels sign up to lesser terms or face having their videos blocked from YouTube’s free service. Many of the most successful streaming services, including those mentioned before, have approached indie labels with terms that are equitable with the major labels. They argue that artists like Childish Gambino and Danny Brown are just as important to a quality music repertoire as Rihanna and Justin Bieber. “It seems clear that YouTube is putting the screws to the indies, and from our perspective what they’re doing is wrong,” said Sachin Doshi, vice president of content and distribution at Spotify. “We’re proud of the fact that we treat indies on par with the majors … There’s no substantial difference in the economics of our payouts from one artist or label to another.”

Some of those who are negotiating with YouTube accuse them of giving major record labels lower rates — but in return accepting larger advances or other significant payments from the big companies to make up for the difference. Indie labels are angry about this, because, due to a “negative most-favored-nation clause,” all labels must accept the same terms, and lower-revenue indies can’t possibly afford to pay millions in advances. Some have accused the big companies involved in the negotiations of transforming the online-content marketplace into a shady deal where the biggest companies get the best rates. Supporters say that YouTube is setting itself up for failure with only a small number of indie labels would agreed.

Independent labels have long complained that they deserve more respect than given from music services negotiating licensing deals. To indie labels’ supporters, YouTube is being the ‘bully’ in this situation, not giving indie labels any room to have a say.

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