YouTube Indie Labels Fight A Nuanced Negotiation, But Music Fans Lose If Videos Are Blocked

The ongoing standoff between YouTube and a number of independent music labels has hit a sour note, and the only question left is who will blink first.

YouTube, which is owned by Google Inc. (NASDAQ:GOOG), took a public relations beating this week after an article in the Financial Times warned that the site was “about to begin a mass cull of music videos by artists including Adele and the Arctic Monkeys” due to stalled negotiations surrounding its forthcoming Spotify-like streaming service.

Robert Kyncl, YouTube’s head of content and business operations, told FT that the blocking will begin in “a matter of days.” Within hours of the article’s publication, the ominous-sounding comment had echoed across the Internet -- with each aggregated retelling more terrifying than the one before. “Any artist who doesn't want to join YouTube’s new ad-free music service will be scrubbed from the site entirely,” was the Huffington Post’s take.

That’s not exactly true, but the real story isn't much better. On Wednesday, a spokesman for YouTube was quick to downplay the doomsday scenario, telling International Business Times that no content will be removed from the site, per se. However, the spokesman confirmed that official videos from music labels that don’t have a deal may be temporarily blocked -- not removed -- until negotiations are hashed out. The blocked videos would still keep their views, comments and other data, the spokesman said. What’s more, the blocking will affect only official music videos from current label partners where a deal is not yet in place. Artists who own their own music -- or who are signed to smaller labels that YouTube doesn’t currently work with -- won’t be affected, nor will videos uploaded through Vevo, which includes some videos by Adele, Radiohead and many other indie artists.

The spokesman said FT’s characterization of a “mass cull” was not accurate, but it appears to be a semantic difference at best. Blocked or removed, the videos caught in the crossfire of the stalled negotiations will not be available for viewing if YouTube follows through with its threat. (To make matters more confusing, the blocking may occur just in certain locations, as artists may be signed to different labels in different countries.) The good news for music lovers is that the odds are in your favor. YouTube said that 95 percent of the music labels it works with -- including the three major labels, Universal, Sony and Warner -- have already signed on to the streaming service. The remaining 5 percent (which is said to include Radiohead’s XL Recordings and Domino Records of Arctic Monkeys fame) are presumably still holding out for a better deal, although neither side is commenting on the negotiations.

YouTube said it would have preferred to keep the negotiations behind closed doors and pointed the finger at industry trade groups trying to win public support for the music labels through strongly worded statements. The Worldwide Independent Network (WIN), an international trade group based in London, has been the most critical. In a statement Wednesday, its CEO, Alison Wenham, accused YouTube of refusing to listen to the concerns of indie artists, calling it a grave error of commercial judgment in misreading the market.”

The criticism appears to be working, at least in the court of public opinion. For the past 48 hours, music fans have been sounding off on various message boards and social networking sites. Some are directing their anger at Kyncl, whose quote to FT touched off the debate.

YouTube’s streaming service, which had been rumored for several months, is expected to launch this summer. For YouTube’s part, the site said the subscription-based service will add another potential revenue stream for its music partners, and some indie musicians agree it’s at least a start. “[I]t will formalize a system for getting paid for plays on YouTube, not only for videos you upload but also for videos others upload using your music,” said Michael J. Epstein, an indie musician and associate professor at the Center for Communications and Digital Signal Processing.

Epstein called the current narrative that YouTube is deleting indie artists “misleading,” but if the site follows through with its threat to block videos by some of the world’s most beloved indie artists, it will only underscore the increasing willingness of major technology firms to play hardball at the expense of a little bad press. And like the ongoing standoff between Amazon and Hachette Book Group, users are once again caught in the middle.

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