YouTube to block indie labels unwilling to join paid service

YouTube plans to drop music videos from independent record labels unwilling to join its new subscription music service

Google’s Youtube has confirmed that it plans to drop music videos from independent record labels that do not agree to the terms of its subscription music service to be launched later this year.

YouTube is about to start testing the new service within Google and independent artists could disappear from YouTube “in a matter of days”, reports the Guardian.

YouTube has become a key promotional outlet for independent labels, but artists including Adele, Arctic Monkeys and Jack White could soon see their videos taken down, the paper said.

The planned subscription service will charge users to watch music videos without ads and download songs to mobile devices, but free video content will still be available on YouTube.

But YouTube’s decision to exclude videos from labels that do not sign licensing deals for the new service is proving to be controversial.

Independent music industry trade body WIN has filed a complaint with the European Commission about YouTube’s negotiating strategy.

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WIN claims that the company has signed lucrative licensing deals with major labels such as Sony, while demanding that independent labels sign up to inferior terms or face removal from YouTube's free service.

Impala, another trade body for independent music companies, has called on European regulators to intervene, reports the Telegraph.

Impala claims YouTube is “abusing its market dominance” to encourage small labels to sign up to "highly unfavourable" licensing terms.

In a statement, Google said the subscription-based service will bring new revenue streams for the music industry.

“We are excited that hundreds of major and independent labels are already partnering with us,” the statement said.

YouTube’s subscription service will compete with Spotify, Deezer, Napster, Apple-owned Beats Music and Google's own Google Play Music All Access.

WIN's chief executive Alison Wenham said the organisation is working to help YouTube understand how important independent music is to any streaming service and why it should be valued accordingly.

Companies such as Spotify and Deezer understand that music fans want a service that offers the complete range of music, and both have excellent relationships with independent labels, she said.

Online music streaming in the UK doubled between 2012 and 2013, with 7.4 billion tracks played on paid-for or ad-funded streaming services last year, accounting for around 10% of music industry revenue.

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