"YouTube is expected to launch a new audio music streaming service to compete with established services such as Pandora and Spotify, and is attempting to force contract terms upon the Independent sector which we understand from our members are significantly inferior to those offered to the international non-U.S. owned ‘major’ record companies (Sony, Warner and Universal)," according to a letter to the FTC posted on the trade group's website. "Our members have been informed that if they do not sign up to these revised terms, YouTube has given notice to them that YouTube will remove/block our members’ and their artists’ musical repertoire from the entire YouTube service, not just the new audio music streaming service."
Such a move will cut into the label's revenue because the website's ad-supported service is becoming a growing sources of income for all labels, not just independent. "As YouTube is one of the leading music outlets the effect on our members on the promotion and monetization of their artists will be severe as the premium videos our members create will be blocked and the User Generated Content videos created by consumers using our members artists’ music will cease to be monetized via advertising," the A2IM letter signed by the trade group's president Rich Bengloff.
"We come to you today to request government intervention related to YouTube’s proposed blocking of our member’s content since we are forbidden under anti-trust laws to negotiate collectively or collectively advocate a boycott of a service," the A2IM letter stated.
YouTube issued a statement in response to a request for comment: "YouTube provides a global platform for artists to connect with fans and generate revenue for their music, paying out hundreds of millions of dollars to the music industry each year. We have successful deals in place with hundreds of independent and major labels around the world; however, we don't comment on ongoing negotiations."