YouTube to Block Music Videos From Smaller Labels

Participate in Subscription Service or Be Left in the Cold

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Google's YouTube is poised to start blocking music videos from independent labels that haven't agreed to be part of a planned subscription service.

About 5% of the music labels Google works with haven't signed up to participate in the paid service, YouTube said today in a statement. The cutoff, which will vary by country, will occur in days, even as negotiations continue.

"We're adding subscription-based features for music on YouTube with this in mind -- to bring our music partners new revenue streams in addition to the hundreds of millions of dollars YouTube already generates for them each year," the company said.

The move comes as another powerful web giant is busily generating bad publicity by weilding its clout. Amazon is punishing suppliers that don't meet its terms by delaying delivery on some products or refusing pre-orders.

Google, competing with music services from Apple and Amazon, is stepping up efforts to attract more users and revenue to its platforms with new features. Already, the company offers other services, including a subscription feature, through Google Play, which provides content for Android-device users.

The Financial Times reported the music dispute earlier today, saying YouTube would block videos from acts including Adele and the Arctic Monkeys if their labels don't agree to be part of the new service.

YouTube has signed up the big recording labels: Vivendi's Universal Music and EMI Group, Sony's music business and Warner Music Group. There are also independent providers, the company said.

The service, regardless of device, will let users watch videos or listen to music, minus advertisements, even when not connected to the internet, according to the company. After some internal testing at Google, the service should be available to the public by September.

~ Bloomberg News with Ad Age staff ~

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