YOUTUBE SECURES LICENSING AGREEMENT WITH UNIVERSAL
Written by ZenKC on December 18, 2017
YouTube has just wrapped up licensing deals with two out of three major labels earlier today with Universal Music Group and SONY Music Entertainment. This follows an earlier deal YouTube had signed with Warner Music Group. The streaming giant currently boasts over 1 billion users per the company’s official website and is reportedly responsible for 46% of all on-demand streaming.
While SONY has yet to comment on the nature of its agreement, Universal chairman, and CEO Lucian Grainge had this to say. “This important step forward provides our recording artists and songwriters improved content flexibility and growing compensation from YouTube’s ad-supported and paid-subscription tiers.” He also added that the agreement would advance “YouTube’s commitment to manage music rights on its platform” – a sore spot for major labels and music publishers over the last few years.
With rumors abound that YouTube may also launch its own streaming service as early as March, confirmed licensing agreements with all of the major labels, which made up over 68% of the market share in 2016, is certainly a step in the right direction.
Sure, Google parent-company Alphabet has tried before. Google introduced audio-only streaming service Google Play Music in 2011, followed by YouTube Music Key in 2014, giving subscribers ad-free music videos. That then morphed into YouTube Red in 2016, letting users watch any video without advertising. None of these services has created more than a fine blip on the general consciousness of the music-listening demographic.
And yet, YouTube itself attracts more than a billion users per month, with tens and hundreds of millions of plays on some tracks, and major labels say they’re not being compensated enough.
In order to break into the subscription service game at this stage, YouTube requires the cooperation of the three major labels – Warner, Universal, and Sony. According to an undisclosed source speaking to Bloomberg, Warner is already on board. YouTube will still need the assistance of Universal and Sony, both of which have a stake in Vevo, as it’s a major distribution hub for music videos (which YouTube also plans to place on the streaming service).
The service is internally being referred to as Remix, though this name isn’t set in stone, and is purportedly aiming to launch in March 2018. Whether YouTube/Google will clear all hurdles before that fast-approaching deadline remains to be seen.