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Indie labels to ask EC to intervene in YouTube dispute

By | Published on Wednesday 4 June 2014


The independent label community will today step up its campaign against the big bad YouTubes by calling on the European Union to intervene.

As previously reported, last month indie label trade bodies the world over issued statements criticising the way the Google-owned company is negotiating with the record companies in a bid to launch its much mooted and rather delayed audio streaming service, a Spotify competitor that will sit alongside YouTube’s vast music video catalogue.

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.

And while it’s thought that Google has managed to negotiate deals with the three majors for its planned audio service, the independents have said that they have been offered “highly unfavourable terms”. Though it’s not actually the unfavourable terms that have angered the indies so much, it’s the alleged threat by YouTube that if the labels refuse to sign up, all of their content on the Google site could be blocked.

Some have suggested that a threat of that kind 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 reckon there is now a case for the European Commission to investigate.

The board of pan-European indie label trade body IMPALA, which has quite a bit of experience in negotiating European competition law, usually in the context of merging major record companies, met during the Primavera festival in Barcelona last weekend and formally decided to make a complaint to EC officials about YouTube’s negotiating tactics.

Later today reps from IMPALA, its UK affiliate AIM, and the Featured Artists Coalition – which is also backing the call for EC action – will stage a press conference in London outlining their plan of action.

Helen Smith, Executive Chair of IMPALA, said last night: “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”.

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 at today’s press conference will be Billy Bragg, who 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”.

Asked about the video site’s ongoing fall out with the indie label community, a spokesman for YouTube told CMU yesterday: “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”.