YouTube has started down a path it will surely come to regret. By threatening independent record labels with the complete removal of associated content from their site if its terms are not met, the online giant has woken a formidable opponent in the form of the independent music industry.
Corralled into action by AIM (Association of Independent Music), this highly motivated collective of enterprises have taken a stand against the “indefensible terms” of YouTube’s new streaming service. With other online platforms such as Spotify offering the accepted industry standard of licensing agreements, the approach of YouTube and its parent company Google is perceived as an affront to independent music and musicians in Britain and the world at large.
What’s more, so far the US owned companies have refused to negotiate, stubbornly standing their ground as if they believe themselves the sole stake-holders in music.
Thankfully British indie labels have in AIM Chairman and Chief Executive Officer Alison Wenham a redoubtable figurehead devoted to fighting their corner. A recent letter she sent to the Business Secretary, Vince Cable MP, leaked online and drew immediate attention to the issue.
“According to our members, the terms currently on offer to independent companies from YouTube are non-negotiable and highly unfavourable, and in many cases, unworkable (for example insisting on global rights which the independent may not be able to grant).”
Government has a duty to play a part in this debate. The domestic music industry is estimated to be worth £3.5bn to the British economy every year, with £634m alone coming from record sales and affiliated business. To allow US owned corporations like Google to dictate their terms of business to British companies would amount to abandonment, even betrayal.
“We face the very real prospect of all internet based trade in creative output being colonised by two or three large offshore corporations, who seem intent on taking as much value for themselves, and passing as little value as possible back to those entities, companies and artists creating the very content on which their businesses are built and are dependent.”
Two sides to every story
Admittedly business models like that of Spotify haven’t yet proven sustainable in the long term. Even if their users keep growing (Spotify now has over ten million monthly listeners), it seems mounting royalty costs will always prevent them turning a profit.
In attempting to rewrite the rules of internet streaming YouTube/Google have gone too far, focusing on profit without a moment’s public or industry debate. They’ve favoured ruthless profiteering and self-aggrandisement over the best interests of musicians worldwide.
Music in the UK has always thrived off the back of the dedication of individuals and independents, not big business.
“The independent music sector is made up of small and medium size enterprises, and employs 80% of the industry’s workforce. It accounts for 80% of all new commercial music releases. Independent record companies act as investors in creativity and culture, searching out individual talent and giving them the starting point to build a sustainable career in the creative industries. They perform a vital role both economically and culturally. Every new genre and trend in music has been kick-started by the independent sector.”
Making an example
The music business isn’t the only creative industry to have encountered this issue. Amazon has had a recent run in with the independent book publishing industry, trying to renegotiate terms on their kindle service and resulting in entire independent publishing catalogues being removed. Major publishing group Hatchette entered the debate against Amazon, giving the argument more balance and causing the independents to stand their ground. Eventually it paid off.
YouTube/Google should have realised by now that viewing indie labels as totally independent entities was a mistake. They are legion, and above all are mutually supportive of each other.
And who wants a streaming service that only plays the latest uninspiring unit shifters? We already have that. It’s called commercial radio.
We hope that like Amazon, YouTube/Google will reconsider their position. Above all, this fight needs to become an important lesson for major corporations in all sectors. Maybe by meeting fierce resistance every time they try and exploit the little guys, big business will start to realise that bullying as a business tactic won’t work in the age of online connectivity and global support networks.