By Andrew Flanagan, New York
YouTube has
softened its posture in negotiations on a new streaming music service with
indie label trade
bodies following an uproar in the past weeks over several provisions in the proposed
contract, according to a report from the Financial Times.
A
week-and-a-half ago, indie trade group IMPALA filed a formal complaint with the
European Commission
against YouTube over the disagreement, saying it was engaging in anticompetitive
behavior. Now, according to a source contacted by the Financial Times, YouTube is
"back-flipping and backtracking."
Indies were
rankled most by what appeared to be an ultimatum by YouTube, with the company telling
labels that they would remove advertisements on their music videos, the
service's principal
revenue generator, if they refused the contract's terms, cutting them off from
a stream that
generates hundreds of millions of dollars for labels each year.
In an
interview with Billboard earlier in June, president of the American Association
of Independent
Music Rich Bengloff told us that “We are treated equitably and fairly by Rdio, Spotify,
Rhapsody and about 20 other services, but obviously not YouTube."
Independent
labels and trade bodies were also upset by terms that appear to favor major labels,
especially a "most-favored nation" clause that would enable YouTube
to lower its rate of pay to
indies if major labels agreed to a lower rate as well. Additionally, the
service has a lower
overall rate of payment, 65.5%, a drop from the 70% typical to streaming
services like
Spotify and
Rdio.
source: Billboard
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