How Does YouTube Blocking Indie Labels From Streaming Effect EDM?

Image via YouTube
Image via YouTube

With Youtube’s recent decision to block the airing of videos from independent music labels that refuse to sign up for their soon to broad-scale roll-out music service, the consolidation happening between major music industry stakeholders and the corporate world truly becomes 2014′s most significant story-to-watch. Ultimately, insofar as the growth, development, and mainstream sustainability of electronic dance music, it’s significant, too.

Known in its development phase as YouTube Music Pass, the new YouTube music streaming service will allow YouTube users to pay a nominal fee to watch videos or listen to music without advertising on any of their devices, even when not connected to the Internet. Financial Times claims that “95% of the music industry is signed up to the new service,” but a) that 5% of “independent” artists not signed up includes acts like Adele and the Arctic Monkeys, and b) doesn’t in any way ascertain the value of the rest of the music industry not in the “known” portion being claimed in that 95% estimate, that “unknown” portion being oftentimes occupied by emerging EDM producers, DJs, and artists.

Democratization has swept over the music industry in the past five years, with the industry (especially in EDM) bearing more of a resemblance to the unrestricted early rock and roll days of cutting a record on a Monday and having it signed, packaged and on a shelf for sale by Monday night. It can be argued that independent labels not being able to use video streaming to provide another level of wealth accrual is either unfortunate, or a logical progression in labels learning how to maintain profit margins in a new environment. Just like as what happened in rock and roll, a time may not be too far away that, especially in EDM, independent labels get swallowed by larger majors at a shocking pace. For an indie with a hot track, the ability to afford paying the artist even a fraction of what that hit is ultimately worth in a depressed environment, this may be one of the options.

If you’re like many and a believer that a track like Jamie xx‘s “Sleep/Sound” is the track of 2014 to-date, very soon the fact that he releases on XL Recordings (along with Jai Paul, and the aforementioned Adele and Arctic Monkeys) will be held against him insofar as his songs appearing on YouTube and Google-related streaming services as XL appears to be holding out for a better rate from the Google-owned streaming giant. Robert Kyncl, YouTube’s head of content and business operations (and what does it say about the nature of the future that the same guys who heads content is also the head of business operations at Google) said YouTube “was offering all rights holders a good deal,” and that they were “paying them fairly and consistently with the industry,” he said, without disclosing rates and figures.

Compound this news with American Association of Independent Music (A2IM) chief Rich Bengloff’s recent assessment of this issue being that “[Indie labels are kicking [major labels] ass,” as since A2IM started in 2005, the indie label market share has grown from 27.2% to 34.6%, including losing the membership of Road Runner and Univision, the association’s two biggest members. Continuing, Bengloff says, “Think about that — we’ve grown by ten points.” He continues, “That means the majors went down by ten points, and that’s why they’re constructing these licensing deals this way, to try and remain relevant and [to try] and get an unfair amount of the compensation.”

An old African proverb stats that “when the elephants fight, it’s the grass that suffers.” If that’s the case, then when the elephants unite, sit and decide to break bread, the grass clearly must suffer more. As Spotify and Pandora zip along adding subscribers at an impressive rate while paying what appear to be minuscule payouts against their fattening bottom line, Apple and Beats by Dre have leapt into a multi-billion dollar streaming embrace, and now sites like Amazon and the aforementioned YouTube are now joining rank.

Ultimately, independent labels are the first that will feel the pain as the middle shrinks in the music industry leaving a wealthy few at the top with a teeming mass at the bottom. In a dance music culture that was once driven by peace, love, unity and respect, it’s likely a difficult world in which to exist. Regarding how EDM responds to moves like these, the era of “PLUR” is either dead, or is ripe for disruption. When deadmau5 and Kaskade can start their own streaming services to counteract SoundCloud‘s desire to consolidate and grow, is there a similar solution that can rise up against Google and YouTube’s aims? Only time will tell.

  • Nicholas James Concklin

    It is important to note that the claim “block the airing of videos” is not entirely accurate. Quoting this Digial Music News article:

    “Note that in Crookson’s article, Kyncl is not quoted anywhere saying “YouTube will be blocking music videos.” Crookson said it. And everyone else repeated it.”

    “With the surrounding text (and other things I’ve read including the partner agreement) I take it to say “We’re blocking videos [from monetization].” When they say “platform” they mean content ID. Saying they’re blocking videos from YouTube doesn’t make any logical sense to YouTube as a platform. One thing I’ve noticed from working with them is they tend to use a lot of insider language when trying to communicate with the masses. It’s very confusing.”

    http://www.digitalmusicnews.com/permalink/2014/06/17/youtube-not-going-remove-music-videos