YouTube vs Independent Record Labels, but its the upcoming artists that will lose out

YouTube’s role as the music industry’s elephant in the room has become more prominent (the elephant has grown a bit). News that YouTube will block several music videos released by independent record labels who have refused to sign up to its licensing terms for its new subscription service has trickled throughout the business and music press alike. The industry was already grappling for solutions as to how to deal with YouTube, where advertising revenues did not sit easily with previous music industry models. But now, while most major labels appear to agree that YouTube has become the major player in the market, many independent labels are looking to find alternatives to YouTube’s emerging hegemony.

With XL Records and Domino among those to not agree to YouTube’s new licensing deals, it appears likely that major artists, including Radiohead, Arctic Monkeys, Vampire Weekend and the XX, are going to be removed from the video platform. The indie labels are holding out for a better deal with YouTube while Impala, a trade body for independent music companies, are looking to the European Commission to help prevent YouTube from using its market position to force smaller companies into accepting unfavourable terms. Furthermore, the body believes that the YouTube’s new subscription service will undermine existing subscription sites like Deezer and Spotify because of the terms it has been arrange using its market position.

YouTube will start blocking these labels in the coming days. Google, who own YouTube, decided to press on these plans regardless as it enters a fast-growing and competitive market. Amazon launched its own service last week while Apple recently bought Beats Music through its $3bn purchase of Beats Electronics. Most labels have signed up to the new terms. The new YouTube service will allow users to pay a monthly fee in order to watch videos and listen to music without adverts – including offline.

Music is being increasingly seen as a key draw towards companies overall strategies – for Google, music will be another draw into its entire internet framework. But for the bands and labels producing music, the more big business takes over the mechanics of the industry, the greater the fear becomes that producers and artists are losing out. Debates have already taken place within the industry about incumbent music subscription services like Spotify, with notable artists including Thom Yorke and David Byrne arguing that smaller, independent artists are only able to make a pittance on the current model.

Like the law, the music industry has not embraced and understood the way in which new technologies affect their business models and it is a delusion to assume that the way things were is the way things should be. But at the same time, as big businesses, with little care for artistic value and only care for overall profits, continue to dominate the music industry more and more, the worries of the people trying to make a living and trying to make music for the sake of music continue to be well justified.

About William Barns-Graham

William is the content manager and head of communications at GC Research Club. He is a professional journalist, researcher and strategist. He has worked at GC Research Club since February 2013 and has rapidly become a distinguished voice in the in-house legal blogging community, writing on Lexis Nexis and interviewing leading legal thinkers and writers, in house lawyers and CEOs within the legal tech world. He has also coordinated the GCRC Sports Panel series.
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