Is Google Forcing Indie Record Labels’ Hands in YouTube Deals?

Source: Thinkstock

Source: Thinkstock

Google’s (NASDAQ:GOOG) (NASDAQ:GOOGL) YouTube may be blacklisting Adele. Not for her music, but because her label hasn’t agreed to the terms of YouTube’s upcoming streaming music service. The Artic Monkeys, Jack White, and other musicians signed to indie labels face similar circumstances. The blacklisting would affect the entire YouTube platform, including the free ad-supported music videos already on YouTube.

The Financial Times broke the story in mid-June, saying that the changes could start to take affect in days. So far, the videos seem to remain up in the United States as of press time. Despite YouTube’s claims that labels representing 90 percent of the music industry have signed up, many indie record labels disagree with the claim.

YouTube is planning to launch a premium streaming music service to compete with Spotify and Beats Music. The company is signing deals with record labels so that their music can be streamed on the new service. So far, this new music service has no release date. Any record label that is not signed up will be removed from all of YouTube, including the current website. Through its current service, YouTube is already the largest music streaming service. Third party services like Vevo will continue to be allowed to stream music if they have a deal already, a Vevo spokesperson told TechCrunch.

So what this means for an independent record label that has not signed a deal with YouTube is that all those videos they put up over the years — some with thousands or even millions of views — will be removed if the indie labels do not comply with YouTube’s new policy. The terms of these agreements are unknown to the public, but many indie labels are holding out on signing these deals. The trade group Worldwide Independent Network is filing a complaint on behalf of indie labels with the European Commission over YouTube’s negotiation style, reported The Guardian.

Outside this conflict, indie labels do make deals streaming music services since the royalties paid by the service are a source of income for them. Many of these labels have deals with Spotify and other streaming music services. As the terms of the deal are unknown, the labels may have a reason for rejecting the terms.

For music fans, this means that YouTube may be lacking some music in the immediate future in an attempt to get the indie labels that are holding out from signing a deal. Many use YouTube as a way to listen to music, playing a video while working or reading something else in another tab on a web browser. A YouTube search may reveal that the only version of a song may be the Vevo or another third party company’s posting of the music video available.

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