Google YouTube U-turn: Indie Music Doomsday ‘Postponed’

Google has postponed their plans to block independent music companies who refused to agree to their terms of its proposed Youtube audio streaming deal, but it is not yet clear for how long.

Many small indie companies did not sign new deals with Google, despite them saying publicly they will block their music videos from YouTube if they don’t sign (which is an apparent breach of contract).

The FT reports claim YouTube has “postponed” the blocks, and instead of attempting to negotiatie with the indies’ licensing body Merlin, YouTube sent out pro forma contracts to indie labels with the threat that the money they earn from their videos would be cut off if they refused to sign.

To add fuel to the fire, there are complaints that the three major labels also received “preferential” royalty terms compared to those of the indie labels. Also, in at least one music contract version, indies must also accept what has been called permanent “least favored nation” status in relation to the majors, and this ultimately means they must promise that they will never sue Google or any member of the public who illegally uploads the labels music to YouTube.  This will essentially mean that YouTube will continue to make money from indies even if they don’t agree and sign off on the terms.

This is not over yet, so we should all stay tuned to find out if YouTube will accommodate the needs of indies when all is said and done.