YouTube is preparing to radically change the site, adding a subscription service that is intended to help them compete in the streaming music industry. The Google GOOGL +1.89%-owned video site has already signed new licensing deals with all of the major labels, but many independents are refusing to take part. Apparently, not only are smaller, indie labels not being offered the same deals as the majors, but the contracts that Google is putting in front of them are less than fair.
In order to show their muscle, Google has stated that any label—meaning smaller, independent ones—that does not sign a deal with them will not only be left off the new service, but will have their content taken down from the original, free YouTube. Vice President and Global Head of Business at YouTube Robert Kyncl recently claimed that they already had deals with 90% of the industry, and that they had no choice but to move forward.
Rumored to be called YouTube Music Pass, the new service is intended to change the way people use YouTube and stream music, paying a premium to skip ads. In addition, people will be able to download music directly from Music Pass, not just listen. While the field is already crowded with popular programs like Spotify, Beats Music, iTunes Radio, Samsung’s Milk Music and recently-added Amazon Prime Music, YouTube is easily one of the most used platforms by people to consume music, and can expect initial adoption to be much higher than a new product from a firm just joining the game.
While initial reports state that the music from artists like Adele, Jack White, and Vampire Weekend would all vanish, that isn’t the whole story. Videos presented on the Vevo platform should remain playable, as the licensing agreements are separate. So, while the Grammy-winning “Rolling In The Deep” music video and its 500 million views should be safe, the ramifications of other clips getting shut down are important.
As noted in an article about the K-Pop artist Psy making money from YouTube ads earlier this week, if a song becomes popular enough, any clip that uses the original music and earns ad revenue is either taken down immediately or split with the track’s owner. Artists make money whenever a cover version, fan-style lyric video, or live version is uploaded on the site and accrue views. As noted in the case of Psy, all of those thousands of additional videos helped him earn over $2 million from ads alone. Soon, all of those would be taken down, and artist revenue could drop.
Perhaps more important is the fact that many up-and-coming artists may have a harder time sharing their music and videos. As sales decline, more and more people look to sites like Youtube, Soundcloud, Bandcamp to let people stream their music, with YouTube being far and away the most popular. Barring lesser-known names from the most popular streaming site in the world could seriously damage the growth of independent artists, and hurt the careers of future stars.
The Worldwide Independent Network (or WIN), an organization created to help push business, creative, and market access interests for the independent music community, is still working to get a fair deal for the indie labels of the world, which hopefully comes before tracks begin getting erased.
“We have tried and will continue to try to help YouTube understand just how important independent music is to any streaming service and why it should be valued accordingly.” said WIN’s chief executive Alison Wenham.