YouTube Signs Licensing Deal With Independent Record Companies
Update (Nov. 17, 11:51 a.m.): A spokesperson has confirmed with Billboard that the launch of YouTube Music Key, the streaming giant's paid music subscription option, has been pushed back to tomorrow (Nov. 18)
Update (Nov. 12, 4:30 p.m.): According to reports from Rolling Stone and Billboard, YouTube will launch it's song-streaming service, Music Key, on Monday in a beta-test mode for "a limited group of people who play the most music on YouTube." The ad-free service will go public in 2015 at $10 per month and will focus on mobile devices and allow users to play music while also using other apps. Music Key will also save videos for offline use.
Over the past month, indie labels have been battling with YouTube about the tricky topic of licensing music. According to a report from the New York Times, this battle is coming to an end. YouTube has signed a deal with small labels, coming to terms on a deal that will bring forth a long-term subscription plan that will allow them to compete with other streaming music services such as Pandora.
For over a year, YouTube has been developing a set of features that allow its site to remain free, but also gives subscribers free perks, including more extensive access to music. YouTube already has deals in place with major record companies and publishers, but its talk with the independent institutions broke down earlier this year.
The licensing deal was reportedly closed with Merlin, an organization which represents most of the small labels worldwide. Despite this deal though, some of the smaller labels reportedly are not content. In order for YouTube to reduce the rate of royalties for all labels, some would have to settle for a lesser deal.
YouTube has yet to make an official announcement on this deal, though executives expect that noticeable changes should be coming soon, including more videos with high quality sound, as well as being able to play through the Google Play streaming service.