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Discussion and debate over indie labels’ YouTube dispute rages

By | Published on Thursday 19 June 2014


And so the YouTube conflict rumbles on, with much debate over the last 24 hours about who is to blame and what YouTube is or is not going to do to the indie labels.

As much previously reported, most independent record companies have so far refused to sign up to YouTube’s new audio-streaming service, and as a result risk having their content ‘blocked’ on the YouTube video site too. Numerous trade groups for the indie sector have subsequently hit out at the Google-owned company’s negotiating tactics.

Increasingly, people are speculating that YouTube’s ‘blocking’ of the indie labels will constitute stopping the music firms from monetising their content. In theory they will still be able to upload and stream videos via the site, but would not be able to tap into any advertising money, which means they probably wouldn’t want to.

It’s still not clear what that means regarding the labels having access to the Content ID system to monitor use of their recordings by third parties. If YouTube was to cut off access to that service it would make its claim to be the copyright-friendly video platform a bit wobbly.

But either way, who to blame for the stand off?

While many trade bodies have been vocally attacking YouTube directly, the president of the American Association Of Independent Music, Rich Bengloff, also took aim at the majors yesterday, who have signed up to YouTube’s audio service on unknown terms. Speaking to Billboard, Bengloff suggested that a fear of the indie labels’ growing market share had led, at least in part, to the majors entering an alliance with Google that gives them preferential treatment.

“We’re kicking [the majors’] ass”, he said. “Think about that – we’ve grown by ten points. That means the majors went down by ten points, and that’s why they’re constructing these licensing deals this way, to try and remain relevant and get an unfair amount of the compensation”.

Though the indies aren’t entirely without blame in this either, wrote music industry analyst Mark Mulligan, because they and the majors allowed YouTube to become too powerful.

“The record labels, indies included, have to take much of the blame here”, he wrote. “They let YouTube get too big on its terms. The big labels had been determined not to let anyone ‘do an MTV again’ and yet they let YouTube do exactly the same thing, getting rich and powerful off the back of their promotional videos. Only YouTube’s resultant power is far more pervasive”.

“Labels are beholden to YouTube as a promotional channel”, he continued. “They have turned a blind eye to whether its ‘unique’ licensing status might be stealing the oxygen out of the streaming market for all those services which have to pay far more for their licenses”.

However, this may now cause problems for YouTube itself, as it tries to enter that audio streaming marketing with a subscription service. By offering so much content for free for so long, YouTube arguably faces an uphill struggle convincing users that they should now pay. Mulligan claims that “just 7% of consumers are interested in paying a monthly fee to access YouTube music videos with extras and without ads. The rate falls to just 2% in the UK”.

Elsewhere, in a blog post about the whole debacle, CMU Business Editor Chris Cooke notes the way YouTube is spinning the dispute, and wonders whether the creative community at large should see through the spin and worry about their partnerships with the Google firm.

He writes: “Google’s spin is this: YouTube is having an upgrade, its licensing deals with the labels therefore need upgrading too, and the pesky indies – which account for a tiny portion of the world’s music (not true by the way) – are being stubborn about it all. But YouTube’s users are demanding access to the all-new service sooner rather than later, so fuck the indies, let’s just do this”.

“But the labels tell a different story” he goes on. “So far, from where I’m standing, their version of events seems more plausible. What Google is doing here isn’t just upgrading YouTube … rather it is launching a brand new service, basically a Spotify competitor under the YouTube brand. [But] for the record companies video and audio are two very different things”.

On YouTube’s negotiating tactics – Cooke continues: “For creators of all breeds and magnitude, it should perhaps raise concern. Because who knows what ambitions YouTube may have in the future? If you are a film-maker or a comedian or a gamer or a video journalist building a business around your YouTube channel today, who’s to say that tomorrow the Google firm won’t decide it wants to be a Netflix or Comedy Central or CNN or whatever, and threaten to cut off your own channels if you don’t licence your content to its new venture at super preferential rates?”

Finally, in its blog on the matter, digital distributor Kudos questioned the motives of the majors and those indie label distributors (some of them major label affiliated), which have signed up to the new YouTube licensing deal.

In a post, the company wrote: “It has been reported that many content suppliers have already signed up for YouTube’s new service including the majors and a few of our digital distribution competitors. You have to wonder, did they strike a deal that was in their artist or distributed label’s best interest, or were there incentives (advances, breakage) which benefited only their bottom line? For our part, we would like to assure our labels that any tangible benefit we receive from any deal concluded with YouTube will be fully distributed”.

The YouTube v Indies dispute will be the lead topic for debate at next week’s live recording of the CMU Podcast at The Roundhouse. Tickets to see the full, unedited discussion are available here.