Google's intentions to force video creators to sign up for its new pay-to-view YouTube Red service or be pulled from its public YouTube display has drawn criticism from Indie music labels.
YouTube Red is the company's ad-free subscription service, and combines both video and music for $9.99 a month. Google Play subscribers will receive automatic opt in, and will find that Red videos will be available offline too. Experts say amateur uploaders won't be affected, but what Google wants to do is nail down producers who have a large following and who receive a tangible quantity of shared advertising revenue.
John Gruber of TechCrunch says Indie music labels who have been offered the take-it-or-leave contracts last summer are doubly upset as the threat comes hot on the heels of Google cutting the revenue share to 55 per cent, which is lower than offered by its rivals.
"To the victor go the spoils — YouTube dominates online video to an almost unimaginable degree," says Gruber.
When European indie trade groups received the take-it-or-disappear contracts last summer, they filed formal complaints with the European Commission's competition authority for emergency action.
The labels claimed that Google's contracts offered lower royalty rates than those brokered with the majors, and that the contracts contained "least favored nation" clauses and a promise not to sue either Google or users if people uploaded the indies' copyrighted material – thus ensuring Google gets all the labels' music, one way or another, if they joined the party.
German publisher Mark Chung, former bassist of German industrial band Einsturzende Neubauten says of Google's moves, "You should probably be trying to dominate whatever market, and break any rule you can get away with breaking. It's the job of regulators and the Courts to stop that.”
The experts say considering YouTube's control of streaming video exceeds that of streaming music, the response of Europe's competition authorities will be interesting.
Youtube Red service is scheduled to launch later this year following what the experts say has been three years of behind the scenes morphing of a business plan.