Will Controversial Dealings Hurt YouTube’s Music Service?

YouTube’s subscription-based music service was originally planned for release around the beginning of 2014. Three months later, we learned that it had been indefinitely delayed, as its developers wanted to debut a strong product right out of the gate (in stark contrast to Google’s usual process of launch and iterate). This seemed like a reasonable plan; after all, some previous YouTube updates (like changes to the site’s ContentID feature and its new commenting system) had been plagued by rocky launches.

Despite this plan, YouTube’s music service has still managed to draw some turbulent press right around its release. Several prominent indie labels have not yet agreed to the terms of YouTube’s service, and organizations that represent those labels have stated the revenue sharing deals Google has offered are not consistent with the rest of the industry. The labels are reportedly given no choice but to sign; if they refuse, YouTube could block ads on their channels and access to their content management systems on the platform, thus preventing the labels from earning revenue on their artists’ videos.

The latest big report on this subject has come from Rolling Stone. The leading music publication talked to several indie labels, who discussed some details of their dealings with YouTube. Ben Swanson of Secretly Group (which represents Yeasayer, among other acts) stated, “It’s not tenable for us to be able to agree to those terms.” Meanwhile, Marc Ribot of the Content Creators Coalition called YouTube’s potential block of disagreeable indie labels “equivalent to being banned from the radio.” A third source has accused YouTube of offering more favorable deals to bigger labels.

Some of these accusations seem fairly damning, but it’s unclear how many labels actually share these sentiments. While the indie labels’ dissent has led to some turbulent press, it may not ultimately have that great an effect on the public perception of YouTube’s service. In particular, YouTube has noted that 95% of labels have already signed up for the music service. Of the other 5%, a YouTube spokesperson simply said, “It’s business.”

YouTube’s supposed block of dissenting labels’ ad revenue may also be a bit overblown. For instance, a VEVO spokeswoman told Forbes that no VEVO videos will be deleted as a result of any holdouts, which means that viewers shouldn’t have to worry about restricted access to the videos they crave. Google also recently bought Songza, and while its unclear if the music curation service will be linked to YouTube’s new program, it has the potential to fill in any holes left by indie label holdouts.

The only potential snag is the absence of the dissenting labels within the actual service itself. If artists like Adele, the Arctic Monkeys, and Franz Ferdinand (all of whom are represented by labels that have quibbled with YouTube) aren’t available on YouTube’s music service, it may dissuade potential subscribers. But the libraries of Spotify and other competing services aren’t perfect, either. While this launch has not been the smooth one YouTube hoped for, it still seems unlikely that the dissenting indie labels will have much impact on the viability of the music service–whenever it does finally launch.