Thursday, June 19, 2014

Does The Music Business Really Need YouTube?

YouTube computer image
We’ve known for months that YouTube will soon introduce its own streaming music service, and in doing so it's revisiting its licensing agreements with all the major and indie labels. For a monthly fee the new service will reportedly allow users to download their streams to enable listening offline, and also eliminate those annoying adverts that we all hate so much but are so necessary to the revenue stream of the content owners.

The negotiations aren’t going so well on the independent label side though, as indie label associations worldwide are refusing to sign what has been labeled as an unfair agreement. As a result, YouTube is threatening to block all current YouTube content from indie labels that don’t sign the agreement and prevent them from uploading anything new as well.

The indie label’s point of contention is that they’re not being offered the same royalty rate as the major record labels, and what is being offered is reportedly lower than that of Spotify. As a result, the American Association of Independent Music (which represents US indie labels) has petitioned the US Federal Trade Commission to intervene, and the Worldwide Independent Network in London has filed a complaint with the European Commission.  

That said, YouTube is well within its rights to refuse service to a company that doesn’t agree to its terms as much as a grocer isn’t obligated to lower the price of a single loaf of bread to the same price that a restaurant might pay for a hundred. The difference is that it’s also the same as not allowing you to purchase anything else in the store unless you buy a hundred loafs of bread like the restaurant. Read more on Forbes.

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