Updated: YouTube Settles Its Beef with Independent Labels…

  • Save


Second update, 4 pm PT: An executive at YouTube has just informed Digital Music News that Music Key will be available in beta next week.  The beta sign-up is here; pricing will be free during a six-month invite-only window, then $7.99 a month before ramping to $9.99.  There are still no details on the new indie deal, though no grumblings that we’ve heard (as of yet).

The original article, published early this morning, is here:

YouTube has quietly settled its beef with independent labels, though neither side is willing to disclose details.

As a result, YouTube is now pointing to sealed deals with a vast majority of indie labels, and the company aggressively moving forward with plans to launch Music Key.

Both sides are keeping the specifics under wraps, though independent label consortium Merlin has agreed to terms with YouTube that ostensibly resolve a raft of earlier issues.  Those included highly-inflexible contracts that promised to remove any independent label that didn’t participate in the premium MusicKey launch, as well as extremely restrictive clauses related to exclusives with other, competing streaming services (like Spotify).

The battlefield is quite, but whether everyone’s happy is another matter.  Both the Financial Times and New York Times are pointed to an amicable handshake, though neither publication knows much about the resulting deal (and no one’s responding to their questions).   But Merlin may have given YouTube a deal it couldn’t refuse, at least if a recent pact with Pandora is any indication.

All of which suggests that this YouTube contract, leaked to Digital Music News earlier, may have been ripped up and substantially revised.

 More as it develops…

Photo credit: Denise Mattox (Creative Commons by ND 2.0)  

42 Responses

    • Paul Resnikoff

      I doubt that: Spotify has 12.5 million paying subscribers, and tens of millions of dedicated users. Though this will of course change the landscape, though Google/YouTube are great at making things that are mediocre, get abandoned quickly, or disappear outright.

      • Anonymous

        Do you think people will use Spotify — an audio-only service that doesn’t even have the latest hits — when YouTube delivers Sony/UMG/Warner/Merlin’s entire audio- AND video catalogs on release day?

        Why would they do that?

        • Paul Resnikoff

          Yes, they will. Things don’t go from black to white in 24 hours. YouTube (and Google) launch a lot of crappy stuff; they abandon products and move onto something shinier all the time. They fight internally and sabotage themselves.

          And YouTube has a user base that is 100% accustomed to free.

          I haven’t even seen MusicKey. Maybe it totally sucks, who knows? Maybe it’s really hard to use on your iPhone. Maybe they’ll have similar issues with content that Spotify is having. Maybe the pricing isn’t good. Maybe it gets horrible reviews; maybe people equate YouTube with crappiness. Maybe they don’t market it enough, or confuse their users. Maybe they name it something like Google Play Music All Access (or whatever that monstrosity is named).

          Maybe they convert less than 0.25% of users. Which is still something, but not enough to knock out Spotify overnight.

          • Anonymous

            “Things don’t go from black to white in 24 hours”

            I didn’t suggest a time frame. But 20,000 labels — including the majors! That’s pretty much everybody. And there’ll still be a free version.

            Let’s face it — we have never seen anything like that in the history of music.

            I think it will kill the rest of the market in 18-24 months.

          • Yep


            If I had to put money on this I would bet Google will close this in 18-24 month.

            Google as a brand is FREE, ad supported. Hardly any kid will pay for YouTube when they can get the same service for free, maybe skip the odd advert.

            As Paul says Google have a bit of a rep on this now. They have too much money and will try anything in ‘beta’

          • Yep

            No chance this will take off. Youtube is a complete mess, the interface is rubbish

            People won’t pay £10 a month to avoid skipping an ad.

            Then when they remove the skip, everyone will gravitate to Spotify

        • Anonymous

          There is definitely enough room in the market for both to survive. But things could get worse for the lesser known services.

          • Anonymous

            “There is definitely enough room in the market for both to survive”

            That’s like saying there’s room enough for neanderthals and homo sapiens.

            You simply have two completely different models — an old one and a new one:

            1) Spotify: Audio-only, missing releases/catalogs from the most popular artists; things can’t go viral.
            2) YouTube: The entire audio AND video catalogs from 20,000 labels, available on release day; things go viral all day long. Then there are interviews, behind-the-scenes, etc.

          • steveh

            Question:- how will youtube music perform on mobiles?

            Will it have the cache facility that Spotify has?

            Will playing many videos kill people’s data allowances?

          • Anonymous

            YouTube Music Key will allow for audio-only streaming and make aggressive use of caching, so it won’t harm people’s data allowances as much as vanilla YouTube.

  1. Anonymous

    Given the ruckus indies caused over the summer, do you really think if they were still unhappy everyone would just be getting “no comments”? Even Merlin can’t control thousands of headstrong, naturally contrarian indie labels. If they weren’t happy, we’d all be hearing about it. That’s my take fwiw.

    • Anonymous

      “If they weren’t happy, we’d all be hearing about it”

      Well, I don’t think everybody’s happy. But things have changed, and the war is over for now. This is going to be huge.

      • Anonymous

        Let’s just say those who were a part of the Merlin deal seem happier than those who were not.

    • One of those indies...

      I wonder if labels who aren’t part of Merlin’s reported deal are asking their distributors how well those distributors did on their behalf… If the distributors didn’t do well and just signed (as they tend to do) all Music Key is going to bring is more stories about artists who bitch about shitty royalty rates. For instance, Music Key is launching in beta at a discounted price of $7.99 (as opposed to $9.99). Who is paying for that discount? YouTube or indie labels and artists?

      Streaming revenues without minimum guarantees and other protections (that are only gained via tough negotiations) are a sucker’s bet – with artists being the worst off.

      • Anonymous

        “For instance, Music Key is launching in beta at a discounted price of $7.99”

        It’s actually free the first 6 months.

          • Anonymous

            “that’s incorrect”

            No, the service is free the first 6 months when you’re invited. And a lot of people will be.

            “if you see an invite in your app or email, try it out for six months for free
            SOURCE: Google

          • One of those indies

            You’re right. I missed that part. I’m sorry about that.

  2. KS2 Problema

    As someone who has subscribed to 6 different stream subscription services over the last decade, I’ve got some insights into what makes a good service (or at least what makes one for me).

    In addition to high fidelity (320 kbps is the new minimum, seems to me, with lossless FLAC in the wings), and selection, you need a good user interface that allows you to use the service flexibly, in ways that fit in with how you listen.

    Google’s All Access is, for my money, the current winner in terms of those criteria. What MusicKey will be like, I don’t know. As long as they don’t mess up All Access, I don’t really care.

    • Jabsco

      As far as I know, people who sign up for YouTube Music Key also have a subscription to Google All Access.

  3. Anonymous

    The url works now (nothing to see yet, though):


    More info: Invite-only for free, for 6 months; then $7.99/month (later $9.99) for ad-free music, curated playlists, trending playlists, artists’ full discography, full albums, background playback, offline viewing. Available in the U.S., spain, Italy, Portugal, Ireland, UK, Finland.

    SOURCE: Variety

  4. Anonymous

    Whoa, it’s beginning…

    YouTube now has a Music tab! And a new “Play a YouTube Mix” pops up!

    Trembling hands… 🙂

  5. steveh

    The Orchard
    Hi there,
    It’s been a long time coming, and amid lots of speculation, YouTube has finally launched its monetized subscription service, YouTube Music Key, in the United States, United Kingdom, Finland, Ireland, Italy, Portugal and Spain, with more countries launching soon. In beta for now, the service is currently only open to select music consumers and anyone with Google Play Music All Access. (Hint: that’s your in if you want to check it out.)
    A mobile and PC on-demand music streaming subscription service, Music Key features high quality music videos at the average market price of $9.99 — with a promotional launch price of $7.99. New options include offline viewing, background-enabled mode (ability to use other apps on your device while watching videos) and of course, no ads.
    Album Playlists, found primarily on auto-generated Topic Channels, are another main attraction. Different from services like Spotify (and different from how they’ve looked on YouTube so far), Albums Playlists feature two kinds of “premium” music videos: YouTube Partner-uploaded videos and Art Tracks, a new product that pairs a song with album art and metadata. This group of features is rolling out in the next few days to all users, including YouTube’s free tier.
    As a new service with a big hand in the music scene already, YouTube Music Key offers a wide array of new revenue opportunities and strong potential for audience exposure. We’ve been working with them closely throughout their pre-launch process, and have already sent in your music for the creation of Art Tracks, so that your songs are monetized on the service immediately.
    We look forward to seeing your revenue grow with the service, and as always, we’re here to answer any questions you may have via your client rep.
    Your Team at The Orchard

  6. Anonymous

    This is obviously going to change to everything, but YouTube could have learned two basic things from artists:

    1) Names are crucial — pick a good one!
    2) Never release unfinished products!

  7. Anonymous

    I don’t like the huge emphasis on playlists.

    They route your fans away from your YouTube channels — definitely not good.

    • Anonymous

      The playlists are also annoying from the consumer’s point of view.

      You’re constantly pushed in the direction YouTube wants you to go, in a less than subtle way.

      • Anonymous

        …and they’re like: You love Sex Pistols, so we think you’ll enjoy these George Harrison songs.

        • Anonymous

          …also, I love that the first playlist in “Music For Every Mood” is “Code Your Face Off”.

          Most of us really need that. It proves that the Google guys understand what’s going on in the real world.

  8. Anonymous

    OK, this is even worse than Ms. Swifts Spotify boycott — Irwing Azoff may yank 20,000 songs (Eagles, Pharell, John Lennon, Gershwins, etc.) from YouTube!

    “YouTube hasn’t made all necessary deals for its new subscription service.”
    SOURCE: Hollywood Reporter

  9. Anonymous

    What’s weird is that it doesn’t come with a ‘Finder’ or ‘Wiki’ type of catalog.

    What you get is 30 million songs without an index.

    Google needs to replace the mess with a searchable, expandable and customizable tree-system, like music–>period–>language–>genre–>sub-genre–>artist.

  10. Anonymous

    So YouTube has a What to Watch tab and a Music tab now.

    In the Music tab, you can watch music videos.

    In the What to Watch tab, you can watch… the same music videos.

    However, you can actually see Katy Perry in the What to Watch tab, while her face is covered by big, black blocks in the Music tab, so I guess it does make some kind of sense.

    But still — it gives me this feeling I always get when I see a new Google product. That it’s dreamed up by goons and designed by thugs.