YouTube gears up to enter battle for music streaming exclusives

MBW told you on Friday that YouTube is investing tens of millions of dollars in a new project designed to boost artists’ careers.

We speculated that the most obvious route for such a venture would be some kind of digital asset creation – especially as Apple Music has opened its chequebook in recent months to fund blockbuster videos/productions for the likes of Drake, The 1975 and Coldplay.

Now we’ve got a better idea exactly where Google‘s money is going.

Initially, YouTube is starting small: making a play to create exclusive video from emerging artists via an existing training initiative called Foundry.

According to Bloomberg, recent Foundry workshops have taken place with up-and-coming music talent in LA and London – with videos of their live sessions set to appear on YouTube this week.

Another Foundry music session is due in New York later this month with five artists including hip-hop act BJ The Chicago Kid and R&B act Gemaine.

But this is just a taster of YouTube’s ambition.

Apparently, the online giant has mapped out talks with senior music business figures over the coming weeks to discuss a ‘deeper collaboration’.

What could that mean?

Come on. We’re sure you can hazard a guess.

Bloomberg suggests that, in these meetings, YouTube will ‘outline ways to better promote artists and bring more exclusive videos to the service‘.

In return for a commitment to YouTube’s cause, say its sources, artists will be offered benefits including the potential opportunity to front Web TV series on the platform.

In addition, YouTube will likely make available its video production and post-production resources (aka ‘YouTube Spaces‘) for artists to shoot videos.

As we ruminated on Friday, this could result in YouTube opening up its Original channels to music talent. Existing YouTube Original shows combine hi-spec, TV-style production values with popular ‘amateur’ broadcasting personalities such as PewDiePie and Lilly Singh.

The big question now: which type of senior music biz figures is YouTube targeting for these meetings, exactly?

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“Platforms based on subscriptions are remunerating those authors; other service providers [are] not. How can they compete?”

Andrus Ansip, European Commission

If it’s the major labels, then a new era of peace and harmony between two oft-warring factions may be upon us; YouTube making available its gigantic resources would shove some rocket fuel under the promotional firepower of the global record industry.

Yet YouTube’s general music philosophy, as shown by its $8m BandPage acquisition earlier this year, tends to be a little more ‘direct-to-fan’ than that.

A more likely scenario: YouTube will target the managers of top artists, offering to pay everything they need to create their own YouTube-exclusive videos – perhaps even their own YouTube-exclusive shows – complete with a tasty marketing/promotion commitment.

That kind of strategy would not only help YouTube neuter the growing exclusive video threat from Apple Music, TIDAL, Spotify and others, but could also become helpful ammunition amidst its current haggling with major music rights-holders.

YouTube is currently locked in negotiations with Universal Music Group over a new long-term licensing deal after the previous one expired without renewal.

YT’s ongoing deals with the other two major labels, Sony and Warner, are believed to expire in the coming months.

Meanwhile, the majors are throwing everything at challenging YouTube’s safe harbor protections in the US and Europe – protections which essentially mean the platform can’t be held legally responsible for copyright infringement taking place on its service.

At the end of last month, a string of top music managers added their signatures to a petition calling on the US Copyright Office to dismantle safe harbor laws peddled by the Digital Millennium Copyright Act (DMCA) in the States.

You have to wonder if certain artist managers could be swayed to side with YouTube if their artists were given paid-for music videos and special treatment on the world’s biggest streaming media platform.

YouTube, meanwhile, has other problems that simply getting cozy with artists ain’t gonna solve.

On Friday, Andrus Ansip, VP for the Digital Single Market at the European Commission, delivered some stinging news for Google – publicly siding with the record industry over the amount of money YouTube pays to artists and labels.

According to the FT, Ansip estimated that YouTube now contributes around €600m a year to music rights-holders, despite its billion-plus monthly audience, while Spotify alone delivers €1.6bn.

“This is not only about rights owners and creators and their remuneration — it is also about a level playing field between different service providers,” said Ansip.

“Platforms based on subscriptions are remunerating those authors; other service providers [are] not. How can they compete?”

Right now, they’re just words – but they could prove hugely significant in time: Ansip is the individual overseeing the modern reconstruction of EU digital copyright laws.

Are big technology companies about to get their wings clipped in Europe over the so-called ‘value gap’?

Is ‘safe harbor’ about to take a beating in Brussels?

Stay tuned.Music Business Worldwide

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