IMPALA and WIN call YouTube's decision to launch streaming service without independent label support "a grave error of commercial judgment"

Brussels / London / New York - 18th June 2014





The Worldwide Independent Network (WIN), the organisation that represents the interests of the global independent music community, has issued a new statement further questioning the actions of YouTube as the Google owned company presses ahead with plans to block and “cull” the content of independent labels that do not sign up to a new music streaming agreement.

At the same time IMPALA, the European trade body who is preparing a complaint to the European Commission, confirmed it is filing its complaint this week, seeking urgent intervention.

YouTube continues to issue content blocking threats to independent labels who refuse to sign what many labels are calling highly unfavourable, and non-negotiable terms, which undervalue existing rates in the marketplace from partners such as Spotify and Deezer.

YouTube has announced plans to launch a new music streaming service later this summer. The service has apparentlynegotiated separate agreements with the three major labels – Sony, Warner and Universal – but according to WIN’s membership has yet to reach any substantive agreement with the independent sector.

WIN and IMPALA were joined by FAC, Featured Artists Coalition in a press conference held in London last week to discuss the threats.

This week YouTube confirmed that it will start content blocking within a matter of days.

Alison Wenham, CEO of WIN said, “Put simply, by refusing to engage with and listen to the concerns of the independent music sector YouTube is making a grave error of commercial judgment in misreading the market. We have tried and will continue to try to help YouTube understand just how important independent music is to any streaming service and why it should be valued accordingly. Music fans want a service that offers the complete range of music available. This is something that companies such as Spotify and Deezer do, both of whom have excellent relationships with the independent music sector. By not giving their subscribers access to independent music YouTube is setting itself up for failure.    We appreciate that a small number of independent labels may have their own reasons for agreeing to YouTube’s terms, that is their prerogative, but they are very much in the minority. The vast majority of independent labels around the world are disappointed at the lack of respect and understanding shown by YouTube. We once again urge YouTube to come and talk to us. “

Helen Smith, Executive Chair, IMPALA added: "This confirms the need for the EC to intervene urgently and prevent YouTube from carrying out these threats. Negotiations should be carried out in a fair and constructive manner without threats of content blocking being used to give YouTube more weight to impose terms that would not be otherwise acceptable. Our complaint is being lodged this week and will set out a number of key issues which we believe need thorough investigation and prompt action. This is a very unique case and revolves around denying consumers 80% of all new releases."

IMPALA was established in April 2000 to represent European independent music companies. One of IMPALA's missions is to keep the music market as open and competitive as possible. IMPALA has an impressive record on competition cases in the music sector. The first EMI/Warner merger was withdrawn in 2001 following objections from the EU after IMPALA intervened, in its first year of existence. It also won a landmark judgment in 2006 in the Sony/BMG case, and when Sony acquired 30% of EMI publishing in 2012, it was at the cost of significant divestments. The biggest set of remedies proportionately ever in a merger case was secured later that year, when UMG was forced to sell two thirds of EMI records and had to accept ten years of scrutiny over the terms of its digital deals. When WMG bought Parlophone in 2013, IMPALA secured a hefty divestments package for its members. On top of mergers, IMPALA has also been involved in other anti-trust cases involving the music sector, such as the abuse complaint against YouTube in 2014 and the call for regulating unfair business practices by large online players. IMPALA has also submitted observations on Apple’s bid to acquire Shazam.  See the organisation's other key achievements in IMPALA's milestones.


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