Indie Labels Flex Muscle in Streaming Fight

Marc Hogan

By Marc Hogan

Lead News Writer
on 07.07.14 in News

As streaming music services grow in popularity, independent music labels and emerging artists are increasingly asserting themselves. YouTube, which is preparing a subscription-based music streaming service of its own, has reportedly softened its stance in negotiations with indie labels, amid European regulatory focus and a backlash from the music world. Meanwhile, some prominent indie labels and artists are finding ways to bypass Pandora, Spotify, Beats Music and the like by launching their own streaming services.

In mid-June, an executive from Google-owned YouTube told the Financial Times the service would start blocking videos from certain indie labels “in a matter of days.” Those labels included XL, home to Adele and the xx, and Domino, whose roster includes Arctic Monkeys. The labels had refused the licensing terms for YouTube’s upcoming subscription service.

Now, the video streaming giant has pushed back plans to blacklist the indie labels’ videos, granting more time for negotiations, the FT reports, citing unnamed people familiar with the matter. A member of the indie label community is quoted as saying of YouTube, “They’re back-flipping and backtracking.”

Impala, a trade group for independent music companies, recently filed a complaint asking the European Union to step in and stop conduct the indie group claims is anticompetitive. Joaquín Almunia, the EU’s competition commissioner, has warned Google he could investigate YouTube if it tries to exploit its market dominance. (A rep for the American Association of Independent Music, Impala’s U.S. sibling organization, didn’t immediately respond to Wondering Sound’s request for comment.)

Separately, The New York Times reports that some indies, faced with streaming economics that make it tougher for smaller artists to making a living, are “embracing the streaming revolution … on their own terms.” Sub Pop, Fool’s Gold, Jagjaguwar and Secretly Canadian are among indie labels teaming with two-year-old, a subscription streaming and download service that offers a label’s albums, singles and material exclusive to the service for a monthly rate. Internet-minded musicians are offering their own services, too, such as Nicolas Jaar‘s Other People and Ryan Hemsworth‘s Secret Songs.

Jaar told the Times: “Spotify, the YouTube service, the Beats service, that’s like going to a big grocery store, and you can find any kind of food you like. But for me personally, I prefer inviting someone over to my house and cooking for them.”

While the big streaming services help indie labels overcome their historic distribution limitations, the fractions of a cent they generate per play have tended to mean only the highest-profile artists make much money from them. That said, indie labels are wisely recognizing that the streaming market is real, and only continuing to grow: A new report from Nielsen SoundScan says on-demand streams in the first half of 2014 were up 42 percent from a year ago, topping 70 billion songs. That’s on pace with a 40 percent jump in vinyl sales (though, at just 4 million albums sold, the LP remains a niche market). Overall album sales, at the same time, are down 14.9 percent.

If you’re a label or artist who isn’t Disney or Pharrell, it makes sense to try to chart your own online-streaming course.