YouTube’s Proposed Contract For Indie Labels Leaks

June 25, 2014

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The dispute between YouTube and independent record labels continues to rage, with each side claiming the other is misrepresenting the situation to the public. But the public may now be able to make up their own minds, with the release of YouTube’s own proposed contract for indie labels.

The row between the video streaming giant and the indie music industry was sparked over contract terms for YouTube’s upcoming music subscription service. Last week, Music Feeds reported that the site was allegedly threatening a “mass cull” of videos owned by independent record labels.

Digital Music News have now published a leaked version of the proposed indies contract, which sheds light on some of the issues at the heart of the dispute. In particular, a clause which concerns the ability of major labels to influence the rate of royalties that are paid to independents:

“To the extent that any major label agrees to any rates for the Google Services that are lower than the rates set forth in Exhibits C or D, including with respect to bundling, Google will have the right to reduce Provider’s analogous rates accordingly, following thirty (30) days written notice (via email will be sufficient) to Provider.”

As The Guardian notes, this is worrying indie labels trade body WIN due to the potential for major labels to accept lower royalty rates for streams of songs in exchange for upfront payments. The clause suggests indies could be forced down to lower per-stream rates without receiving advances.

Also worrying WIN is a clause concerning “Catalogue Commitment and Monetisation.” YouTube wants labels to make their entire catalogues available for streaming on both its free and premium tiers, setting all to have ads shown in and around them, which could potentially be problematic for artists who wish to withhold their music from YouTube as they have with other streaming services.

It’s important to note that the leaked document is just a contract that was sent to indie labels, indicating the terms that YouTube wants them to sign on to, and is not necessarily a reflection of any of the actual deals that were ultimately signed between the two parties or that will be in the future.

However, WIN claims that the contract sent to indie labels was non-negotiable, with no way for labels to push back against some of the demands, as per typical dealmaking. The dispute will likely continue to rage until harder evidence for each side’s claims, like the alleged “mass cull,” surfaces.

Gallery: YouTube’s Proposed Indie Label Contract (Enlarge Top Right)