The independent music community is getting ready to rumble with YouTube after the Internet giant was accused of using bully tactics to sign-up indies for its long-rumored streaming music service.
The Worldwide Independent Network (WIN) has said its members have been threatened with having their videos blocked from the user-generated Web platform unless they agree to terms for YouTube’s new streaming music business. And those terms, apparently, aren’t great.
Sources close to the situation say YouTube is attempting to low-ball indie labels with non-negotiable contracts which offer royalties and conditions so low that the very business of the labels in question would be in jeopardy.
WIN has issued an explosive statement in which it describes YouTube’s approach as “unnecessary and indefensible.” The trade body says it has had “extensive” talks this week with the multi-billion dollar tech giant, but there’s been no breakthrough.
WIN, established in 2006 to represent the global independent industry, explains YouTube’s contracts presented to indie labels are on “highly unfavorable,” and on “non-negotiable terms,” and the deals on the table “undervalue existing rates in the marketplace from existing music streaming partners such as Spotify, Rdio, Deezer and others.”
WIN claims YouTube is approaching independent labels directly with a “template contract” and an “explicit threat that their content will be blocked on the platform if it is not signed.” Under contracts that its parent company Google signed a year ago with major labels, YouTube already has the necessary licenses with Universal, Sony Music and Warner Muic to operate a paid music service similar to Spotify or Rhapsody.
“This is not a fair way to do business,” comments Alison Wenham, CEO of WIN and chairman of AIM (Association of Independent Music). “WIN questions any actions by any organization that would seek to injure and punish innocent labels and musicians — and their innocent fans— in order to pursue its ambitions. We believe, as such, that these actions are unnecessary and indefensible, not to mention commercially questionable and potentially damaging to YouTube itself, given the harm likely to result from this approach.”
Though nothing has yet been made official, YouTube’s music subscription service is said to be gearing up for a summer launch through Google’s Music Pass on Android. The New York Post reported YouTube’s Music Pass will “likely” charge $5 for the ad-supported tier and $10 for its ad-free service.
Billboard reached out to YouTube for comment and received the following statement from YouTube: “YouTube provides a global platform for artists to connect with fans and generate revenue for their music. We have successful deals in place with hundreds of independent and major labels around the world, however we don’t comment on ongoing negotiations.”
London-based Wenham is calling on YouTube to work with WIN’s members to reach an agreement that is “fair and equitable for all independent labels.”
YouTube originally planned to launch its on-demand music streaming service late last year. Those plans slipped because of a desire to “get it right,” an executive briefed on YouTube’s plans told Billboard last month.