YouTube Uncovered: YouTube’s Fight with Indie Labels

Over the summer, YouTube became embroiled in an ugly dispute with independent record labels. The labels allege that they were offered unfair payment contracts for a music streaming service YouTube is planning to launch. The service, reportedly called YouTube Music Key, would compete with established players such as Spotify, Rdio, Google Play and Beats Music by letting paid users stream music ad-free and download it for offline listening. If successful, Music Key could be a lucrative source of revenue and would allow YouTube to create an image as a legitimate music platform.
Implementing the service, however, turned out to be more complicated than expected. YouTube succeeded in signing all major labels, or over 90% of the music market, to the service, but independent labels protested that they were being forced to take far worse royalty deals than their larger competitors. The independent artists involved include big names such as Adele, Radiohead and the Arctic Monkeys.
YouTube, in turn, threatened in June to remove the independent artists’ music from YouTube entirely. The independent labels have decried this as commercial intimidation, even filing complaints with the European Commission to avoid a takedown and to suspend the deals YouTube has already signed. Facing widespread pressure, and hesitant to remove some of its most popular artists, YouTube has indefinitely delayed the takedown. As of October 20, no videos have been removed.