YouTube vs. Indie Record Labels: Agreement 'Unnecessary and Indefensible'

Worldwide indie label reps blast Google's attempt to block content of members who don't sign new agreement.

The Worldwide Independent Network (WIN), the organization that represents the interests of the global independent music community, has responded to news that YouTube intends to block the content of members who do not sign a new music streaming agreement, describing it as "unnecessary and indefensible."

WIN was formed in 2006 to represent the global independent industry, which boasts the second largest global market share after Universal Music Group.

With YouTube expected to launch a new music streaming service, the Google-owned video monolith has apparently negotiated separate agreements with the three major labels -- Sony, Warner Bros. and Universal -- but according to WIN's trade association, they have yet to reach any substantive agreement with their members.

PHOTOS: Lady Gaga, M.I.A., Macklemore Rock First-Ever YouTube Music Awards

WIN is raising major concerns about YouTube's recent policy of approaching independent labels directly with a template contract and an explicit threat that their content will be blocked on the platform if it is not signed.

According to WIN members, the contracts currently on offer to independent labels from YouTube are highly unfavorable, with non-negotiable terms, and undervalue existing rates in the marketplace from music-streaming partners such as Spotify, Rdio, Deezer.

WIN has held extensive talks with YouTube at their instigation over the last 24 hours to try and resolve this issue, but no progress has been made. WIN's request for YouTube to rescind the termination letters sent to its members has not been agreed to as yet.

Alison Wenham, CEO of WIN and chairman of AIM (Association of Independent Music, U.K.) said: "Our members are small businesses who rely on a variety of income streams to invest in new talent. They are being told by one of the largest companies in the world to accept terms that are out of step with the marketplace for streaming. This is not a fair way to do business. WIN questions any actions by any organization that would seek to injure and punish innocent labels and musicians -- and their innocent fans -- in order to pursue its ambitions. We believe, as such, that these actions are unnecessary and indefensible, not to mention commercially questionable and potentially damaging to YouTube itself, given the harm likely to result from this approach. The international independent music trade associations call upon YouTube on behalf of their members to work with them toward an agreement that is fair and equitable for all independent labels."

STORY: AIM Meet on Impala's WMG-EMI Deal

Wenham points out "uncomfortable echoes of similar behavior by MTV 10 years ago, who chose initially to take a similar approach in undervaluing the independent sector, but who subsequently concluded a deal on fair terms, which lasts to this day. It is for every company to determine their own commercial arrangements, but it is in no one's interest to see independent artists being undervalued in the digital marketplace."

Other organizations and WIN members from around the world also joined calls for YouTube to reconsider its position. Statements of support have so far been received from organizations in 18 countries, including the U.S., Canada, France, Germany, Italy, New Zealand, Spain and Sweden.

Added IMPALA executive chairman Helen Smith: "It is unfortunate that a service like YouTube, with a worldwide scope, appears not to be interested in treating all copyright owner creators equally. This has an effect not just on A2IM's label members, but also upon their artists and the consumer fans of our artists who will lose this form of access to our music. We hope that we can continue discussions with YouTube and ultimately restore and grow our relationship with this very important service."

American Association of Independent Music (A2IM) president Rich Bengloff registered disappointment with reports of non-good faith negotiations with YouTube. "We urge YouTube to reconsider its approach and recognize that independent labels deserve to be treated with more respect. It is in everyone's best interest for music service providers like YouTube to work with the independent music community to negotiate a deal that is fair, equitable and respectful for all parties involved."