YouTube is jumping into the music streaming fray, and it could affect music videos by artists represented by at least two independent record labels, according to the Financial Times.
Robert Kyncl, the head of content and business operations, told the Financial Times that "in a matter of days," YouTube will begin blocking videos by various artists, after the indie labels refused to sign onto new licensing terms of service.
The music streaming field is getting crowded. There are well-known platforms including Spotify and Beats, and just last week Amazon launched its own streaming service for Amazon Prime users. Now Google, which owns YouTube, is launching a service.
"While we wish that we had 100% 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," Kyncl told the Financial Times. According to Kyncl, around 90 percent of record labels have signed on.
The Guardian spoke to the head of trade organization Worldwide Independent Network (WIN), who says this is just not so. "They have suffered a simple but catastrophic error of judgement in misreading the market," WIN chief executive Alison Wenhan told the Guardian.
The licensing agency, Merlin, who represents independent labels, estimates that independent record labels represent 32.6 percent of the market's streaming and sales.
WIN told the Guardian that YouTube has signed lucrative deals with major record labels, but presented lesser terms for independent labels. The Financial Times is also reporting that a label boss fears that improvements to YouTube's free service will be so compelling, folks won't pay for subscriptions.
WIN and another trade body, Impala, have filed complaints to European Commission about Google's negotiating tactic, according to the Guardian and Financial Times, respectively.
Ultimately, this tactic to get independent labels to agree to YouTube's terms hurts artists, much the same way that Amazon's price war with Hachette hurts authors. The Financial Times singles out Adele, the xx and the Arctic Monkeys, but the list of artists is far longer, and some of the bands are far less well known. These bands will be hit in an era where some, like David Byrne, fear that independent music is unsustainable.
Domino represents Wild Beasts, Owen Pallett, Hot Chip, Animal Collective, Devonte Hynes and more. XL Recordings' artist roster includes Sigur Ros, Vampire Weekend, Radiohead, the Horrors and others. It is unclear if all of these artists will have their videos blocked. Salon has reached out to both labels for comment.
YouTube is a powerful tool for an emerging artist. It allows musicians to grow a fan base through posting songs and videos. YouTube also generates advertising money. A Google spokesperson told the Guardian, “in addition to the hundreds of millions of dollars YouTube already generates for them each year. We are excited that hundreds of major and independent labels are already partnering with us.”
The YouTube streaming interface will start a test phase in the coming days.