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YouTube has announced they are internally testing a paid music service which will launch to the public soon. The controversy is that YouTube and independent music labels have not been able to reach an agreement – so YouTube is threatening to block their videos from the YouTube paid service AND free service. Agreements have been reached with the three major labels – Universal, Warner and Sony.YouTube music

It is reported that YouTube is offering Independent labels an inferior licensing deal compared to the major label deals. Concerning these deals, Robert Kyncl, YouTube’s Head Of Content and Business Operations says, “While we wish that we had a 100 per cent success rate, we understand that is not likely an achievable goal and therefore it is our responsibility to our users and the industry to launch the enhanced music experience.”

Beats Music has loudly championed paying the same royalty rates to everyone, major and independent labels.

YouTube may not put the same importance in having independent artists equally represented. Depending who you talk to, independent labels account for 15% to 33% of the recorded music market share. Alison Wenham, CEO of WIN, responds bluntly on the YouTube controversy, “They have suffered a simple but catastrophic error of judgement in misreading the market.”

For a monthly charge, premium YouTube music will likely be free of advertising and available on all your devices, with or without an internet connection.

Sources: Financial Times, The Guardian, Phonofile