Independent music labels are involved in a dispute with YouTube over the licensing terms of the website’s long-anticipated music-streaming service.
The Worldwide Independent Network (WIN), which represents independent music labels around the world, said in a statement that YouTube is using “unnecessary and indefensible” negotiation tactics to get its members to sign up for a subscription service or risk having their work blocked on the site.
“Our members are small businesses who rely on a variety of income streams to invest in new talent,” says WIN CEO Alison Wenham. “They are being told by one of the largest companies in the world to accept terms that are out of step with the marketplace for streaming.”
WIN accused YouTube of offering independent labels “highly unfavorable” and “non-negotiable” contracts that undervalue rates set by music-streaming sites such as Spotify and Rdio.
While these negotiations are at a standstill, WIN reports that YouTube has already negotiated agreements with major-labels Sony, Warner Bros. and Universal. In the global marketplace, WIN boasts the second largest market share after Universal.
“This is not a fair way to do business,” says Wenham. “ WIN questions any actions by any organization that would seek to injure and punish innocent labels and musicians — and their innocent fans — in order to pursue its ambitions.”
Statements calling for YouTube to change its position on the issue have been sent from 18 countries, including the United States, Canada, Britain and many European nations.
“YouTube’s self-proclaimed role as ‘a distribution platform for original content creators and advertisers large and small’ is little more than the hollow branding of a company that, in reality, is losing touch with the very creators and audience that have bloated the size of the platform into the stratosphere over the years,” says Kristoffer Rom, co-chairman of the Danish Independent Record Association.
Rom likened YouTube’s approach to a “virus” that would spread and destroy the independent record industry if YouTube chose to undervalue the work of musicians.
YouTube responded to these accusations in a statement obtained by the Guardian.
“YouTube provides a global platform for artists to connect with fans and generate revenue for their music,” said a YouTube spokesperson. “We have successful deals in place with hundreds of independent and major labels around the world. However, we don’t comment on ongoing negotiations.”
This isn’t the first time YouTube has run into legal trouble over how they pay artists. YouTube has been involved in a legal dispute since 2010 with GEMA , a German copyright organization, over how much the website should pay for streaming copy- righted material. GEMA wanted 12 euro cents ($0.16) per stream, which YouTube rejected. GEMA subsequently sued YouTube, and the dispute continues.
While YouTube’s music- streaming service was supposed to be released late last year, the official launch date remains unknown.
In March the New York Post reported that YouTube’s streaming service will “likely” cost $5 per month for an ad- supported version and $10 for a commercial-free option.