THE PROPOSED CONTRACT that YouTube is offering indie artists before they join its upcoming music service has been published in full online.
Digital Music News published the entire contract that YouTube is offering indie artists (with a less than complementary heading), containing the terms and payment structure it’s offering.
One major areas that’s causing problems among artists is the power major labels have in payment rates. If a major label agrees to a lower rate than the ones described in the YouTube contract, Google will have the right to reduce the indie label’s rate accordingly.
Rate Change: 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 [percentage rate and per subscriber minimum], 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.
This would mean that the major record labels could negotiate an advance payment in return for lower rates. Indie labels are worried that they will be forced to accept the lower per-stream rates without receiving the advances the major record labels get.
The other concern is the section entitled ‘Catalogue Commitment and Monetisation.’ which states that all artists provide Google with the same content on the same day it provides it to any other music streaming company.
Catalogue Commitment and Monetisation: it is understood that as of the Effective Date and throughout the Term, Provider’s entire catalogue of Provider Sound Recordings and Provider Music Videos (including Provider Music Videos delivered via a third party) will be available for the Premium and Free services for use in connection with each type of Relevant Content… Further, Provider will provide Google with the same Provider Sound Recordings and Provider Music Videos on the same day as it provides such content to any other similarly situated partners.
This causes problems for those artists who would want to withhold their music from YouTube, or has agreed an exclusive release on another platform.
Last week, YouTube claimed that record labels representing 90% of the music industry had signed up to the service, which is expected to see a public launch later this year.
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