Update Wednesday, June 18 at 10:13 a.m.
YouTube may be aiming to become more of a player in the streaming music game, but some indie labels might not be along for the ride.
In the coming days, Google-owned YouTube is planning to begin removing videos from certain independent acts because their labels could not come to an agreement on YouTube’s revamped royalty terms, according to the Financial Times. The dispute means that videos by artists like Adele and the Arctic Monkeys could be removed in certain markets.
The deals with independent labels have been a sticking point in the development of YouTube's subscription-based music service, which was originally expected to launch early this year. A trade association that represents independent labels issued a public statement in May claiming that YouTube was trying to strong-arm smaller labels into accepting non-negotiable terms that would offer smaller payouts than competing services such as Spotify and Deezer.
YouTube has declined to comment directly on the negotiations, but it has said the new streaming service will generate more revenue for labels and artists. “Our goal is to continue making YouTube an amazing music experience, both as a global platform for fans and artists to connect, and as a revenue source for the music industry," spokesman Matt McLernon said in an emailed statement. "We’re adding subscription-based features for music on YouTube with this in mind -- to bring our music partners new revenue streams in addition to the hundreds of millions of dollars YouTube already generates for them each year.”
It’s not clear how widespread the video removals will be. Robert Kyncl, YouTube’s head of content and business operations, told the Financial Times that YouTube has reached deals with about 90 percent of the music industry, including the three major U.S. labels. The remaining labels' videos will only be removed in the markets where they distribute music—so, for instance, some Adele videos might go offline in the UK, where Adele is signed to independent label XL, but remain available in the U.S., where Adele has a deal with Columbia Records.
YouTube's new, on-demand paid streaming service is expected to allow users to more easily organize songs by album, listen to songs via YouTube while using other mobile apps and download songs for offline listening. It will enter a crowded market that now also includes Amazon, which launched a music streaming service this week, and Apple, which is buying Beats’ headphone line and music streaming service for $3 billion.
Update: McLernon, the YouTube spokesman, later clarified that the videos in dispute will not be permanently deleted from YouTube in any markets but will instead keep their viewcounts, comments, likes and presence in users' playlists in case they are later restored.