YouTube, the world’s largest video service, is planning to launch a paid subscription based music service while rivaling with indie labels over royalties.
The announcement comes Tuesday (June 17th) while the Google, Inc.-owned company gets dragged into a public dispute with some of the world’s leading independent record labels over royalties that will likely result in the blockage of some of music’s most popular artists like Adele, Arctic Monkeys and Vampire Weekend, who account for up to ten percent of all the music YouTube has acquired rights to stream.
The paid service is expected to be launched in a few months, although no launch date has been announced, and is most likely to allow the playback of videos without ads and support offline playback on mobile devices.
The company said in a statement that it is “adding subscription-based features for music on YouTube to bring our music partners new revenue streams in addition to the hundreds of millions of dollars YouTube already generates for them each year.” The people also state that “hundreds of major label and independent artists” have signed on for the service, including the three major labels — Universal Music Group, Sony Music Entertainment, and Warner Music Group.
“We are adding subscription-based features for music on YouTube to bring our music partners new revenue streams in addition to the hundreds of millions of dollars YouTube already generates for them each year.”
The news comes on Tuesday from anonymous sources familiar with the matter but are not authorized to speak publicly about the matter.
It has been confirmed that the small number of independent artists who have not agreed to the terms will have their music blocked in some countries, including on the free version, starting in a few days so users are not disappointed that some artists are offered on the free site but not on the paid one. YouTube execs have decided to take down the songs that can’t be available on both services, as a solution until an agreement is made.
This could cause some confusion as to which countries certain artists are blocked. Many artists are represented by different labels in different countries. For example, Adele is signed with feuding indie label, Beggars Group XL Recordings in the UK, but Sony Music’s Columbia Records distributes her music in the US.
The disagreement could result in a huge loss of revenue for the labels and its artists who refuse to sign given the service generates advertising revenue and worldwide exposure.
Google Inc. has yet to release an official statement on the matter.
Author: Buddy Iahn
Buddy Iahn founded The Music Universe when he decided to juxtapose his love of web design and music. As a lifelong drummer, he decided to take a hiatus from playing music to report it. The website began as a fun project in 2013 to one of the top independent news sites.