Indies bring in the EU over YouTube negotiations

July 2014

Recorded music


The independent label community will today step up its campaign against Google owned YouTube by calling on the European Union to intervene, having already criticised the way the YouTube is negotiating with the record companies in a bid to launch its much mooted and rather delayed audio streaming service, a new Spotify and Amazon competitor that will sit alongside YouTube’s vast music video catalogue – with what appeared to be an initial threat from the dominant YouTube – to remove all of the Indie’s material from YouTube if they didn’t sign up to what were perceived to be unfavourable terms all of their content on the Google site could be blocked.

The royalty rates paid by YouTube when music videos are streamed on its site were already becoming contentious in the music industry, as the audio streaming services which pay higher rates started to stress that the free-to-view video site was hindering their attempts to woo more mainstream consumers. The rates subsequently offered for YouTube audio were similarly criticised once they were on the table – although the three major labels have done deals with YouTube, albeit on unknown terms.

The threat of removing material if the independent labels didn’t play ball could constitute an abuse by Google of YouTube’s near monopoly in the video streaming domain to give the firm an unfair advantage in the audio space, which is possibly why indie labels in Europe brought in the European Commission to investigate.

The board of pan-European indie label trade body IMPALA met during the Primavera festival in Barcelona last weekend and formally decided to make a complaint to EC officials about YouTube’s negotiating tactics.

Helen Smith, Executive Chair of IMPALA, commented “YouTube is behaving like a dinosaur, attempting to censor what it doesn’t like. This is completely out of sync in Europe where the EC has systematically insisted that European citizens should be able to access the cultural diversity and choice they demand. Europe has already had to take a tough line with Google on issues such as search and privacy. Prompt intervention with YouTube must be the next step”.

Meanwhile AIM chief Alison Wenham, who also heads up the Worldwide Independent Network, added: “We will start this process in Europe with IMPALA referring YouTube to the EC for urgent regulatory action, which will be the first step in a global campaign. Our fellow trade associations around the world, representing tens of thousands of independent companies, also take issue with the actions of YouTube towards the most creative sector in the music industry. We must therefore do everything we can to protect the independent sector from the actions of one very powerful company, which seeks to railroad content owners, and by association their artists, into unfair and unjust contracts while threatening to block access to their platform”. Wenham also wrote to the UK’s Business Secretary, Vince Cable, calling on hi to act in the matter.

Speaking for the FAC, one of its co-Chairs, Radiohead’s Ed O’Brien, added: “Indie artists and labels are at the cutting edge of the future of music. To restrict them in this way is to risk creating an internet just for the superstars and big businesses. Without the innovation and risk-taking of the indie sector we lose a vital ingredient in pushing us all forward”.

Representing the artist community Billy Bragg said: “YouTube are shooting themselves in the foot with their attempt to strong-arm independent labels into signing up to such low rates. They’re in danger of launching a streaming service that lacks the innovative and cutting edge sounds that independent artists bring. Would music fans be willing to pay for such an inferior product? I don’t think so”.

The BPI, which represents both indies and the major labels, has given its backing to the WIN campaign. The trade group’s Chief Executive Geoff Taylor said in a statement: “YouTube is the dominant platform for music video and an essential partner for all UK labels and artists. We believe it is vitally important that all independent labels should have access to the YouTube platform and should not be unfairly disadvantaged in doing so”. He added: “A healthy independent sector is crucial to the success of British music overall. We will strongly support the campaign for fair access for independents and we call on YouTube to demonstrate that it respects and values independent music”.

Asked about the video site’s ongoing fall out with the indie label community, a spokesman for YouTube said: “YouTube provides a global platform for artists to connect with fans and generate revenue for their music. We have successful deals in place with hundreds of independent and major labels around the world, however we don’t comment on ongoing negotiations”.

And it seems that YouTube is going ahead with its threat to purge material owned by Indie labels who have refused to sign a new YouTube streaming agreement – and the labels will see content pulled “in a matter of days” – that’s according  YouTube’s Head Of Content And Business Operations, Robert Kyncl, in an interview with the FT.  The global grouping for indie label trade bodies, the World Independent Network and pan-European indie labels trade body IMPALA have already announced their intention to take the dispute to the European Commission, arguing that YouTube’s moves are anti-competitive – they also requested that the EC implement emergency measures. But Kyncl told the FT that the deal being offered would see the indie labels paid “fairly and consistently with the industry”, and that YouTube’s payouts to the music industry would hit $2 billion “soon”. Responding, WIN said that the terms on offer are in fact “highly unfavourable and non-negotiable” and “undervalue existing rates in the marketplace from partners such as Spotify and Deezer”. Meanwhile Alison Wenham, who heads up both WIN and UK indie label group AIM, disputed the suggestion that there are only a few stragglers causing a fuss who wouldn’t be noticed if they were gone. For one thing, those stragglers include labels like Beggars Group and Domino who between them represent some major artists saying that indie labels who had agreed to sign the new deal are “very much in the minority”, adding: “Put simply, by refusing to engage with and listen to the concerns of the independent music sector YouTube is making a grave error of commercial judgment in misreading the market. 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”.


From YouTube to Amazon, tech innovators need to be held to account – YouTube’s threat to indie music labels is just one of many examples of why the new cultural gatekeepers need to follow the rules, Comment, the Observer, 22.06.14

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