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YouTube to postpone indie block while licensing talks continue

By | Published on Thursday 3 July 2014


YouTube has postponed plans to block the indie labels from its video platform as talks continue over the Google-owned subsidiary’s plans to launch an audio streaming service.

As previously reported, indie label trade bodies from across the world hit out in May after YouTube threatened to block them from its market-leading video streaming site if they didn’t sign up to the firm’s in-development Spotify competitor.

Although the exact meaning of ‘block’ remains unclear, it is likely that indies not on board for the new audio service would not be able to monetise their videos on YouTube by allowing the site to put ads next to their content.

The indies, led by global trade group WIN, said that YouTube was offering below-market rates for its streaming service, that would give it an unfair advantage over Spotify et al. It’s also suspected that the three majors received sweeteners to secure their involvement, which were not being offered to the independents.

WIN added that the threat to block the indies from the YouTube video service, a crucial promotional platform and double revenue stream for the labels (they can earn ad revenue from their own videos and user-generated content using their music), was an attempt to strong arm the independents into a bad deal on the audio set-up.

Pan-European trade body IMPALA then reported YouTube to the European Commission, arguing that those negotiating tactics constituted an abuse of market dominance, with EC competition law over-seer Joaquín Almunia confirming his people could investigate the Google firm over market dominance abuse claims earlier this week.

For its part, YouTube insisted that its new audio service and existing video platform were two parts of the same thing, making opting into just one impractical. It also insisted that many indies were actually signed up to the new service, either because they are distributed by a major, or because they are allied to one of the three big indie label distributors which have done deals: The Orchard, INgrooves and Believe.

But there have been mixed signals coming out of YouTube on the unofficial grapevine, some insiders insisting YouTube Audio was ready to go with the deals it had place and that the remaining indies would indeed be blocked, others seemingly admitting that the firm had screwed up its negotiations with the independents resulting in an embarrassing squabble in the public domain.

Either way, according to the Financial Times any blocking of the indies has been put on hold, albeit temporarily, while talks continue to try to placate those labels not on board, many of which are represented by the Merlin organisation in the digital dealing domain. It’s not clear whether the embarrassment of a very public dispute or the threat of an EC investigation has played a role in securing the block postponement, though Google won’t be too keen on either.

Listen to our recent debate on the YouTube dispute at the CMU Podcast: Live here, featuring Cooking Vinyl’s Sammy Andrews, Songdrop’s Brittney Bean and Music Managers Forum’s Jon Webster.