There are some shady dealings going on behind the scenes at YouTube regarding its new streaming music service.
YouTube is having difficulty getting independent music labels to sign on to its new service due to "highly unfavorable and non-negotiable terms," The Guardian reported. In response, the video search engine is flexing its Google-backed muscle, threatening to take down videos from acts like Adele, Arctic Monkeys, and Vampire Weekend if their labels won't agree to license their content to YouTube for the new music subscription service.
If this turns out to be true, users searching for music on YouTube, the world's second largest search engine, may not find content from their some of their favorite independent artists. This is blatant censorship from Google, designed to pressure small independent labels to sign unfavorable deals with YouTube.
Let's unpack this a bit.
Late last year, rumors began swirling about YouTube's soon-to-be-released streaming music service, believed to be named "Music Pass." The service mimics established players such as Spotify, Apple-owned Beats Music, and the recently announced Amazon Prime Music. These services allow users to listen to an unlimited amount of music for a monthly subscription fee.
YouTube has an incredible amount of music content thanks to its music video library, which is fueled by both major and independent record labels.
In preparation for the Music Pass service, YouTube has been working with these labels to sign contracts which allow YouTube to license the content for sale through its subscription service, rather than an ad-based one, which is how YouTube currently operates.
YouTube has managed to ink contracts with major labels like Sony, Warner, and Universal, but has run into trouble with some of the independent labels due to what the labels feel are unfair terms. If the labels refuse to sign, YouTube threatens to block their content from YouTube, according to "termination" letters sent to some of these labels. This is according to WIN, a company that represents independent labels worldwide.
This Is Crazy
Big corporations bully smaller businesses all the time, but it's hard to believe that YouTube would risk angering its user base by blocking popular content in order to strong-arm a licensing deal.
It's similar to a mob boss, who already "taxes" neighborhood businesses, then goes into a shop and threatens to burn the place down if they don't pay the boss more money. The problem is if the mobster burns down too many stores, there won't be any shop owners left, and the mob boss has lost the revenue he had to start with.
If YouTube pushes these independent labels too hard, and they block too much of their content, YouTube will actually lose out on the revenue it would have made running ads on the existing content. Licensing agency Merlin estimates that collectively, independent labels account for more than 32 percent of market share of the music industry's sales and streams.
Not to mention that users expect a video search engine to return relevant results for an artist's name, which YouTube can't do if it's busy blocking the artist's content as a negotiating tactic with their label.
Why Would YouTube Risk This?
According to Billboard, it's in the best interest of YouTube's users if the content was taken down:
YouTube executives argue that they cannot offer music on the free service without it also being available on the paid service as this would disappoint its subscribers. The solution? To take down songs that can't be available on both services.
We don't yet know how things will ultimately shake out, but if the independent labels' fears about their content being taken down come true, we have an unsettling precedent for search engines to censor content as a punishment for being uncooperative.
This isn't a manual penalty that removes content from search results due to guideline violations or copyright violations. This sounds like a straight-up, "Give us your content on our terms or we'll cut you off from YouTube" play. It's a bully tactic plain and simple.
Could This Bullying Set a Precedent That Might Seep Into the Non-Music-Based World?
Might Google one day require you to build an Android version of your iOS app, else your company website disappears from the organic search results?
Could Google require ecommerce stores to offer Google Wallet as a payment option or their products will be blocked from Google Shopping?
Is the day coming when Google will force content creators to create a Google+ account and verify their content in order to compete in organic search?
Within search results, information tied to verified online profiles will be ranked higher than content without such verification, which will result in most users naturally clicking on the top (verified) results. The true cost of remaining anonymous, then, might be irrelevance. – Eric Schmidt, former CEO of Google, "The New Digital Age"
Seemingly small situations like how YouTube is dealing these independent labels not only makes it harder to find content from artists we love on YouTube, but may be a gateway for Google to pressure other types of content creators and brands in ways that directly affect our businesses and our livelihoods.
Whose Side Are You On?
Is YouTube abusing their power, or is it really best for users? Do you think they'll block all of these artists' content, or are the independent labels blowing this out of proportion? Is this just a one-time thing, or is it an indicator of where Google is going with all content creators?
Share your thoughts in the comments below.
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