Youtube To Launch Subscriber-Only Music Service

youtube-logo-oblique-650pxYoutube/Google has confirmed it will launch a subscription-based music streaming service, despite a public quarrel over royalties with leading indie labels like the Beggars Group (Adele, Arctic Monkeys), whose bands would be taken off of Youtube altogether.

This move is viewed by independent music labels as a bully tactic to force them into signing a deal for the subscription music streaming service. Youtube’s logic is: If we can’t offer these bands to our paying customers, we can’t offer them to the viewers who frequent the free part of Youtube, because that would be unfair towards the subscribers.

Furthermore Youtube claims that it has generated over $1 billion for the music industry over the past couple of years. Still, Rich Bengloff, president of the independent label trade association A2IM, states that the royalty deals with streaming services like Rdio or Spotify are more favorable to the rights owners. Industry insiders have made some terms of Youtube’s offer public: Non-negotiable contracts with conditions so bad that they threaten the existence of indie labels. The conditions are worse than what Google agreed to pay for the rights on their music streaming service Google Play.

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