Independent Music Labels Are in a Battle With YouTube

YouTube’s plans for a subscription music service have stalled over a dispute with independent record labels, which contend that the online video giant has offered unfair licensing terms and threatened to block their music from the site.

Members of the Worldwide Independent Network, an umbrella for various trade groups around the world, complained that the contracts YouTube had offered independents are “out of step with the marketplace for streaming,” and less favorable than those that have apparently been agreed to by the three major labels -- Universal, Sony and Warner.

Negotiations between independents and YouTube, which is owned by Google, have dragged on for months. But according to several people with direct knowledge of the talks, the indies’ decision to speak out was driven by a recent warning that if labels failed to agree to YouTube’s licensing terms, music on the indies’ official YouTube channels would be blocked.

In addition, those labels would be unable to collect advertising revenue from user-uploaded videos that included their music. In response, a YouTube spokesman said, “We have successful deals in place with hundreds of independent and major labels around the world; however, we don’t comment on ongoing negotiations.”