Fans will no longer be seeing artists like Adele, the Arctic Monkeys and Radiohead on YouTube, thanks to the video website's effort to create its own paid music streaming service that will compete with the likes of Spotify.
Rumors of a YouTube paid streaming service abounded since last year, and Google, which owns YouTube, has only confirmed the rumors just now.
"We're always working on new ways for people to enjoy YouTube content across all screens, and on giving our partners more opportunities to reach their fans and generate revenue. We'll be adding subscription-based features for music on YouTube with this in mind, and look forward to sharing them with music fans," says Google in a statement.
The confirmation comes amidst accusations by independent music labels that Google is "bullying" music producers into signing the new agreement that will make their music available in YouTube's paid ad-free platform. Details of the contract have not been revealed, but the Worldwide Independent Music Industry Network (WIN) says independent labels such as XL Recordings, which represent Adele and The XX, and Domino, which produce music by the Arctic Monkeys, have accused YouTube of offering "highly unfavorable and non-negotiable terms."
WIN also says YouTube has gone the way of threatening to remove indie music videos from its paid tier if the labels do not agree to the new terms. YouTube has already closed the deal with 95% of the labels in the music industry, including the big three: Universal, Sony and Warner, but the remaining indie producers have gone to the European Commission for intervention.
YouTube, however, is adamant about starting testing for its music streaming service. In a report by the Financial Times, YouTube head of content and business operations Robert Kyncl said it will start removing certain videos from its free ad-supported platform "in a matter of days." One source familiar with the situation told Reuters that it may be necessary for YouTube to remove music videos to provide a consistent user experience.
YouTube and other technology companies have always found themselves in a tussle with record labels when it comes to payment agreements, but Kyncl told the FT that YouTube is "paying them fairly and consistently with the industry." WIN says YouTube is making "a grave error of commercial judgment" by preventing music fans from getting access to independent music.
"By not giving their subscribers access to independent music YouTube is setting itself up for failure," says WIN chief Alison Wenham. "The vast majority of independent labels around the world are disappointed at the lack of respect and understanding shown by YouTube."
YouTube and a vast majority of the world's biggest technology companies are quickly realizing that music is one of the best ways to lock in their customers to their services. Apple, for instance, has lately announced the purchase of Beats Electronics, which led to music industry veterans Jimmy Iovine and Dr. Dre becoming part of the Apple team. Amazon also launched its own music streaming service for its Prime membership club. Yahoo, meanwhile, is said to be working on its own video service.
