Starting internal tests of subscription service but faces accusation of 'catastrophic error of judgement'
Independent artists could disappear from YouTube "in a matter of
days" after the Google video service confirmed it was dropping content
from independent labels that have not signed up for its upcoming
subscription music service.
YouTube is about to begin testing
the new service – which will charge people to watch and listen to music
without ads, and download songs to their mobile devices – within the
next few days, initially within Google.
The company's head of content and business operations, Robert Kyncl, told the Financial Times that the service – previously rumoured to be called YouTube Music Pass – will launch more widely later in the year.
His
confirmation that YouTube will block videos from labels that do not
sign licensing deals for the new premium tier will be hugely
controversial among indie labels, with trade body WIN already filing a
complaint to the European Commission about its negotiating strategy.
"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," said Kyncl,
claiming that YouTube has signed up labels representing 90% of the music
industry.
Independent labels are likely to disagree. Their licensing agency Merlin estimates that indies collectively account for a 32.6% market share of the recorded music industry's sales and streams.
Contacted
by The Guardian following his comments, WIN's chief executive Alison
Wenham was blunt in her response. "They have suffered a simple but
catastrophic error of judgement in misreading the market," said Wenham,
who had organised a press conference earlier in the month to protest at YouTube's plans.
Wenham said YouTube was "setting itself up for failure" and only a small number of independent labels would agree to its terms.
"We
have tried and will continue to try to help YouTube understand just how
important independent music is to any streaming service and why it
should be valued accordingly. Music fans want a service that offers the
complete range of music available. This is something that companies such
as Spotify and Deezer do, both of whom have excellent relationships
with the independent music sector," she said.
WIN claims that
the company has signed lucrative licensing deals with major labels
Universal, Warner and Sony, while demanding that independent labels sign
up to inferior terms or face having their videos blocked from YouTube's
free service.
“Our goal is to continue making YouTube an amazing
music experience, both as a global platform for fans and artists to
connect, and as a revenue source for the music industry,” a Google
spokesman said. He said the subscription-based service would bring new
revenue streams “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.”
Wenham's criticism echoes a claim made at the event by
musician Billy Bragg, who said "I don’t know why they’ve opened this
hornet’s nest right now, apart from corporate hubris. I don’t think they
realise what a stupid thing they’ve done."
Artists including
Adele, Arctic Monkeys and Jack White could see their videos taken down.
The site has become a key promotional outlet for independent labels of
all sizes in recent years.
YouTube attracts more than 1bn monthly
viewers, with music one of its biggest categories. Its upcoming premium
music subscription tier will compete with Spotify, Deezer and Napster
among other services, including Apple-owned Beats Music and Google's own
Google Play Music All Access.
Independent labels have long
complained that they deserve more respect from digital music services
negotiating licensing deals, and set up Merlin to strike deals on their
behalf.
The agency has remained silent throughout the recent
arguments about YouTube's planned new service, although its chief
executive Charles Caldas criticised the company at an industry conference in late April.
Referring
to an earlier quote from Bragg suggesting that musicians unhappy about
royalties paid by Spotify should be "marching to YouTube central with
flaming pitchforks", Caldas said: "I can’t say Billy’s right, but I can
say that he’s not wrong."
The move comes as Amazon too has begun
to flex its muscles in ways that limit the content its customers can
receive. Amazon is delaying shipments and refused pre-orders for some titles from Hachette, publisher of Harry Potter author JK Rowling, and home to David Baldacci, Stephen Colbert, David Foster Wallace and others.
It has also pulled pre-orders
for forthcoming Warner Home Video features, including international
blockbuster The Lego Movie, 300: Rise of an Empire, Winter’s Tale and
Transcendence.
Story Source:
http://www.theguardian.com
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