Europe and Google aren’t exactly the closest of friends. Unlike in the United States, where Google’s connections to various agencies and mercenaries working on behalf of the US military are legion, Europe has taken a harder stance against the search giant, at least in recent years.
Google has been embroiled in a seemingly endless antitrust investigation in the European Union, and while a settlement may be on the horizon, there could be more investigations to come. And most recently, an EU court ruling ordered Google to comply with requests to remove “inadequate, irrelevant, or no longer relevant” search results from people’s digital histories. That order has been taken seriously, with Google taking down its first links today.
So it’s no wonder independent music labels have asked the EU for help in resolving their very legitimate grievances against Google-owned YouTube. According to multiple reports, YouTube will start blocking videos from artists whose record labels refuse to join its new subscription streaming service. The terms of these deals, according to the Worldwide Independent Network (WIN), a trade organization representing independent labels, are non-negotiable and worse than the deals offered by competitors like Spotify and Rdio.
Now, Reuters reported that Impala, a Brussels-based music trade organization, has asked EU antitrust officials to investigate YouTube for these anticompetitive practices.
“YouTube is insisting on extracting a package of rights that no other partner could get away with,” the organization said in a statement to Reuters. “The terms appear to seriously undervalue existing deals in the marketplace with other business partners.” The statement adds that YouTube’s terms restrict labels’ freedom when it comes to special releases, like exclusives. Impala didn’t go into further detail, but it sounds like it plays into a turf war between Google and Apple: YouTube likely wants to prevent artists who join its service from, say, releasing early exclusives on iTunes like Beyonce did for her latest album, which sold 1 million copies in its first week. It also underlies some of the very real problems that are arising as three of the biggest consumer tech firms, Apple, Google, and Amazon, look to take over the streaming music market.
This is just the latest development that underlies an increasingly rocky relationship between YouTube and creators. While Spotify and Pandora have long been scapegoats for the musicians’ financial woes, artists are starting to realize that YouTube may be the worst offender of them all. I recently spoke with Jack Conte of the band Pomplamoose, who told me that while his music videos were streamed over 3.5 million times last month on YouTube, his royalty check was only $149. British singer-songwriter Billy Bragg last February told Music Ally, “If we’re going to speak out about the paucity of payment from streaming services, if we’re pissed off at Spotify, we should be marching to YouTube Central with flaming pitchforks!”
The issue is that despite having the largest number of users, YouTube sends less US revenue both in aggregate and per-user than Pandora or paid music subscription services (meaning Rdio or Spotify’s paid tier of users. I break down the math here). And now it seems it’s using its advantage as the largest distribution channel to bully artists into signing up for below-market deals, then threatening to remove their videos from YouTube if they don’t comply.
YouTube’s leap into paid subscription streaming has gotten off to a rocky start before it’s even launched. And an EU investigation and possible intervention, even if it doesn’t affect labels in the United States, will only add to YouTube’s headaches. Here’s hoping that YouTube realizes this on its own, or else the anger directed its way from artist communities will dwarf the Spotify-Pandora backlashes. And with the streaming music space becoming increasingly crowded, and the global market only poised to explode in the coming years, artists may start questioning whether they still need YouTube at all.
[GIF adapted by Brad Jonas]