Youtube upsets independent record labels with subscription service

As independent record labels defy the company’s new licensing agreements, Youtube strikes back by taking their videos down

  • By Charlotte Gill | Wednesday, June 18th, 2014

Artists such as Adele, whose representative independent record label has refused to sign one of YouTube's new licensing agreements, could have their videos axed from the site within days

The Google-owned company has upset a number of independent record labels by asking them to sign new licensing agreements as they launch a subscriber-based service.

Rumoured to be called YouTube Music Pass, the service is due for launch later this summer, and offers customers a tier-based system – rather like that of Spotify – where they can pay a small fee in order to access and download music or videos without advertisements.

Youtube will begin removing videos by independent record labels in the next few days

So far 95 percent of the music industry has agreed to the new terms, according to Robert Kyncl, Youtube’s Head of Content and Business Operations. Signees include Universal Music Group, Sony Music Entertainment and Warner Music Group.

However Youtube’s new service has riled many independent record labels, many of whom consider they have been offered “unfavourable terms”. Alison Wenham, CEO of Worldwide Independent Network, said YouTube is “making a grave error of judgement in misreading the market”, adding that independent record labels worldwide were “disappointed at the lack of respect and understanding” shown by the company.

Labels that have declined to sign up for the deal include XL Recordings, who manage artists including Adele and The xx, and Domino, whose artists include Arctic Monkeys.

Trade body IMPALA – which represents labels including 4AD, Cooking Vinyl and Domino – has appealed to the European Commission, suggesting that YouTube’s latest move is an abuse of its dominance over the music industry.

Youtube will begin removing videos by independent record labels in the next few days, unless they agree to the contract. The new licenses could prove problematic in cases where artists are represented by multiple labels. For example, Adele is represented by XL Recordings in the UK, but Sony Music’s label Columbia in the US.

In recent months music streaming has become a highly competitive area, which rivals Amazon and Apple have, too, tried to gain the foothold over.