News of a new music subscription service from YouTube has been making the rounds the past few weeks. And now the latest news coming out is that they are taking that first step towards that by signing new, long-term agreements with two of the major music labels. Since they locked down the third of the big three a few months ago, this may signal that the video-sharing giant may actually become a music-sharing player as well.
It was not an easy deal to close, as it took them two years of “tumultuous negotiation” to be able to lock down both Universal Music Group and Sony Music Entertainment. Last May, they were able to sign the other one, Warner Music Group, to a new deal as well. This solves most of their licensing issues as they will reportedly come up with a paid service to monetize the millions of people who listen to music through the video channel.
The next hurdle would be to convince people, who are currently listening to music for free, to actually start shelling out money for a paid service. This is actually the crux of their negotiations with the three, that YouTube needs to properly compensate the record labels for all that copyrighted music floating around. Universal reportedly persuaded Google to improve their scanning of copyrighted content that people upload illegally
As to what strategy YouTube will employ to convince people to pay, that remains to be seen. Sources say that some songs and videos will not be available for free users, so that’s something. The crucial thing for Google at this point is to ensure that record labels trust them again after accusing them of lax regulations when it comes to copyright as well as insufficient compensation of artists.
VIA: Bloomberg
