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Indie labels in talks with YouTube after criticism of the web giant’s negotiating tactics

By | Published on Thursday 22 May 2014


Reps for the independent label community are currently locked in negotiations with YouTube over the Google platform’s audio streaming ambitions, following mounting criticism of the web giant’s negotiating tactics.

The growing YouTube backlash in the music sector has been palpable in recent months, to the extent that German collecting society GEMA, long-time critic of the video platform, must be feeling uber-smug around about now.

Although the YouTube video platform is a revenue generator for the labels and publishers, with signed-up rights owners getting a cut of ad revenue, the per-play monies paid by the Google platform are tiny compared to most other streaming set-ups.

Which is irritating for the labels in itself, but all the more so as the other streaming services tell the music rights companies that the dominance of a free-to-access YouTube is hindering their ability to sign up subscribers, especially in the youth market.

Though it is that market dominance – YouTube is by far the biggest streaming music service, and an incredibly important marketing platform for the industry – that has put the labels in a tricky position with regard to any attempts to negotiate up royalty payments. YouTube definitely needs the music content, but then the labels definitely need YouTube.

Though at the recent MusicTank event on the streaming sector it was noted that YouTube’s widely known ambitions to become a fully fledged streaming service, with full-catalogue audio streaming alongside the more haphazardly provided videos, provides an opportunity, in that the balance of power was temporarily tipped in the labels’ favour.

Unless, Beggars Group’s digital supremo Simon Wheeler noted, the majors did deals favourable to them in the short term, allowing YouTube to try to strong-arm everyone else into the party. And while I’m not saying Wheeler is psychic or anything (I guess he’s just seen how the big tech guys do business many times before), you do sense something not altogether unlike that scenario has subsequently occurred.

Certainly the indies are not impressed with the deal that has been put on the table by YouTube for its new streaming platform, nor the ‘take it or leave it’ approach, nor the implication that failing to sign up could result in holdout labels’ content being blocked across the wider YouTube platform. You know, the content that helped Google transform YouTube from the home of cats falling off TVs into the biggest content network in the world.

The indie music community was preparing to go public with its anger and frustration over YouTube’s negotiating tactics overnight – with statements actually going live on some news services in Asia and Australia – but the Google platform stepped in at the last minute in a bid to placate the labels. Though withdrawing any talk of labels’ existing YouTube content being blocked in retaliation for not signing up to the new service will almost certainly be a prerequisite before any placating can begin.

It’s believed talks between YouTube and the indies – which presumably also involves indie label digital rights group Merlin, though it was unable to comment – are now ongoing. It remains to be seen how things progress.