YouTube Finally Sorts Out Deals With Small Labels
Ever since YouTube struck deals with major labels like Sony, Warner and Universal, it has been unable to bring small labels on the same page. Now after a month of dispute, YouTube has finally signed a licensing deal with independent record companies.
YouTube has long been trying to introduce a subscription service that would provide special benefits to paid users. The service aims to make YouTube able to compete with other online music portals like Spotify and Rhapsody. This deal with small labels would help the company in making this service a success.
The sources of NYTimes close to the deal revealed that YouTube recently struck a deal with Merlin, which is an organization that owns thousands of small music labels around the world.
Google-owned YouTube is famous for its free-model. They have been developing features to preserve this model, but at the same time they are moving the service towards paid and exclusive content. To make it possible, YouTube signed deals with major labels to give paying subscribers extensive access to music. But the talks with small labels didn’t go as planned.
The small labels claimed that they were not being provided the same benefits as the major labels. They complained that the deals offered to them were far far inferior to those given to Sony, Universal, and Warner.
This new deal now makes small labels happy. Terms of agreement are not disclosed yet.
The representative of Merlin didn’t respond to messages seeking comments. YouTube spokesperson similarly refused to comment but said that “hundreds of major and independent labels are already partnering with us.”
YouTube’s new service is yet in behind-the-curtains phase and not much has been revealed yet. However, music executives expect that it will provide exclusive access to music, let users save offline video, and will include high-quality audio. It might also be linked with Google Play Music All Access.
YouTube is expected to generate $7.2 billion in gross advertising revenue this year. But the company has long considered ways to explore the possibility of adding paid services to its free offerings.