YouTube has a new streaming music service that is almost ready to launch. The contract that was sent to labels that want to get in on the service isn’t setting too well with some of those labels, though. There are terms in the contract that smaller, independent labels don’t really like. Unfortunately, there’s not much they can do about it.
There’s been a bit of talk about the new contract, but Digital Music News is the first to post the whole contract online for us to see. One of the major points of contention in the terms is one that states independent labels must give up their negotiated royalty rate for a lower rate if a bigger label agrees to a lower rate themselves. This takes control out of the hands of independent labels and leaves it squarely in YouTube’s lap. This is exactly what Google wants, but it’s not making smaller indie labels very happy. The contract also asks that indie labels present their entire music catalogue for streaming, but some of them have signed artists that specifically refuse to be a part of any online streaming service. These particular artists have signed special deals with smaller labels because they want to avoid streaming services like Spotify and Pandora. If indie labels are required to present their entire catalogue of artists to YouTube, it could make things uncomfortable for them.
Google says that all of these terms are standard for any music service. They don’t see why it’s a big deal. The company says that all labels will be presented with the same terms moving forward, so no one single label will get a more favorable contract. If labels don’t agree to the terms and sign the contract, YouTube will pull their music from the site. YouTube has actually already begun pulling videos from labels that don’t agree to these terms, and they say it’s only going to affect five percent of musicians that are on YouTube. If you’re one of those five percent, you can’t be happy.
YouTube’s music streaming service is rumored to be similar to Spotify or Rdio, but it will offer videos in addition to streaming music. There will be two pricing options, one free and one for $10 per month. The free version will have ads, while the paid version won’t have ads and will offer unlimited streaming and offline caching.