Indies hold out for better deal from YouTube music video service

Independent recording artists are holding out against YouTube in a rights payment dispute that may see indies such as Adele and Arctic Monkeys taken off the popular video sharing service.
YouTube, now owned by Google, is planning to launch a music subscription service in competition with streaming music services such as Pandora and Spotify, and is putting licence agreements in place with music publishers in preparation for the launch.
Most big record company music publishers have reached agreement with YouTube/Google on licencing terms, but independents say they have no negotiating power and that YouTube is misusing its market power to force them to accept “unfavourable and non-negotiable terms.”
Last month, the Worldwide Independent Network, representing independent artists issued this statement

“YouTube is expected to launch a new music streaming service. The service has apparently negotiated separate agreements with the three major labels – Sony, Warner and Universal – but according to WIN’s trade association colleagues has yet to reach any substantive agreement with their members.
“At a time when independent music companies are increasing their global market share WIN has raised major concerns about YouTube’s recent policy of 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.
“According to WIN members, the contracts currently on offer to independent labels from YouTube are on highly unfavourable, and non-negotiable terms, and undervalue existing rates in the marketplace from existing music streaming partners such as Spotify, Rdio, Deezerand others.

YouTube says it will block content from artists who have not signed the agreement. The impending service, rumoured to be called Music Pass, is expected to charge $5 for an ad supported service and $10 for an ad free service.
YouTube already pays a royalty to music rights holders and its owner, Google, says it has paid out more than $1 billion since acquiring YouTube in 2006. YouTube’s starndard terms of service are here and a sample contract, published by the Harry Fox representative agency, indicates that the YouTube standard offer is 15% of ad revenue (click excerpt to see the full licence).

YouTube says 90% of recording artists have signed up to the new licence agreement, most through their record publishing companies, but the other 10% who are holding out may be blocked within days.
In a statement, YouTube said:

“While we wish that we had 100 per cent success rate, we understand that is not likely an achievable goal and therefore it is our responsibility to our users and the industry to launch the enhanced music experience.”

Public beta-testing of the new YouTube service is expected to begin this month.
Artists have appealed to the European Union to take action against Google for misusing its market power.
The dispute is yet another example of how musicians are trying to navigate the emerging new media world in a way that benefits both them and the companies that play their music. In Australia, commercial radio internet streaming is currently disabled in regional areas because of the industry feels that the music publishing agency PPCA is asking too much for rights to simulcast radio broadcasts on internet audio streams. The PPCA represents international and Australian record companies, and Australian recording artists. There is no dispute between the radio and the artists’ representation agencies APRA and AMCOS.

Tags: | | | |