In case you’ve missed the drama that’s been going on, here’s a quick recap for you: YouTube will be launching a music streaming website (à la Spotify) sometime this year. In their quest to get an extensive music catalog, they’ve been accused of bullying Independent music labels into signing unfair contracts by threatening to block their artists’ videos from YouTube, thus bringing us to a stalemate: indie labels refuse to sign a contract to YouTube’s new streaming service, and YouTube is threatening to pull their artists’ videos from their site.
The newest update to hit the fan is the aforementioned contract that sparked this feud, which has been published online by Digital Music News. According to the nitty-gritty details in the contract, it’s confirmed that YouTube has requested the smaller labels automatically give up their agreed royalty rate if a major label agrees to something lower.
Simply put, if Sony Entertainment agrees to a lower royalty rate for their artists, then YouTube could send an indie label an email notifying them, and then immediately lower their royalty rate as well. This is bound to garner negative press for the YouTube team.
How do you think this will unfold? Will YouTube stick to their threats, and wipe away the Indie artists on YouTube? Or will the labels cave into that dreaded contract, suck it up, and take the low royalty rate?