Merlin, the independent label master rights licensing agency that refers to itself as the fifth major, has reached a global licensing deal with YouTube.
Terms of the deal were not released, but the deal points have been published to its members, which have to opt in to be included under the agreement.
Merlin members include Merge Records, Warp Records, Epitaph, Naïve, Tommy Boy, One Little Indian, Yep Roc/Red Eye, Kontor New Media, Beggars Group, Sub-Pop, !K7, PIAS, Domino and Koch/E1.
The agreement calls for Merlin's member labels to be paid out whenever their official videos or user-generated videos featuring their repertoire are played via the YouTube service, which pays royalties out of revenue generated by selling advertising.
"It is an all encompassing deal allowing labels to create their own channels," Merlin CEO Charles Caldas told Billboard.biz. Caldas noted that YouTube is an important destination for music fans providing many promotional tools for record labels. He adds the agreement, also allows its member labels to build a premium monetization model at Youtube.
In a statement, Chris Maxcy, Head of Global Music Partnerships at YouTube, said "We're continually looking for new ways to connect independent artists with their fans and we're thrilled to have struck a deal with Merlin that will help us do just that, while compensating them for their efforts at the same time."
Caldas says the independent label sector "is more important to the success of services like YouTube than the four majors because their member's repertoire provides the final chunk of content that drives the value equation."
Billboard estimates independently-owned repertoire in the U.S. at about 31.9% through the first nine months of this year, while Merlin estimates its members' market share at about 10%, or nearly one-third the sector's overall market share. Moreover, in some European countries, Merlin's market share is much larger Caldas says.