The Indies: A Level Playing Field?

When the news broke last week that a select group of independent labels were unhappy with the progress of negotiations with YouTube, an A&R executive with a California-based rock indie immediately reached out to Billboard. His reaction: "Why? We love YouTube."

YouTube has already announced deals with Universal, Sony BMG and Warner Bros., and those in the independent community are eagerly awaiting their own agreement with the video-sharing site. Yet a number of U.K. label sources told Billboard that they believed the licensing rates for indie video content were not on par with those offered to majors, at least in the early rounds of discussion. The apparent discrepancy prompted Simon Wheeler, head of digital at the United Kingdom's Beggars Group, to comment to billboard.biz that the company would willing to "take legal measures" to ensure an equal deal (billboard.biz, Jan. 30), although it was unclear what kind of action would be taken or when.

In the United Kingdom, indies are used to rallying behind such labels as Beggars as well as the AIM for indie causes. But conversations with a number of top U.S. indies during the past few days indicate they are not as quick to ratchet up the legal rhetoric against YouTube. And while media giant Viacom ordered YouTube to remove more than 100,000 videoclips when licensing talks broke down, indie labels aren't yet displaying such aggressiveness.

YouTube has become absolutely vital to the independent community. There is no other site with YouTube's traffic numbers that allows hundreds of thousands of people to view, archive and discuss Of Montreal and Cat Power videos. Besides, poorly shot cell phone clips of live Spoon shows, or YouTube's ability to get an instant audience for a relatively young rock act such as the Ponys, certainly isn't hurting the sales numbers for indie labels.

Perhaps that's why the ire over YouTube discussions is generating mixed feelings from indies.

"I'm really torn about it," one label head says. "To date, we have viewed it as having good promotional value. But there does come a point when we -- and we as in indies -- are contributing to the revenue streams of all these other people, whether it's YouTube or [Internet service providers] or other Web sites just selling advertising. Increasingly, I am bothered by that."

But the label isn't asking YouTube to remove any of its videos, and will continue to feed YouTube content. The head of a digital department at one large indie says, "YouTube is better exposure than mtvU," referring to the video giant's college campus station.

That's not to say label reps believe the promo benefits outweigh any licensing payouts. As Tommy Boy head Tom Silverman says, "There's nothing complex about an unlevel playing field." But most indies contacted by Billboard view YouTube as a friend, and are happy to let discussions progress at a relaxed pace.

"We've always put up as much on YouTube as we could," Merge label manager Spott Philpott says. "We kind of see it as promotional MP3s. If some blog has a whole record up, that's not very cool, but we do provide people with MP3s."

Such sentiments were echoed at Sub Pop. "We've given away MP3s in an age when we've done better than ever businesswise, and YouTube has definitely helped us a lot," new-media head Dean Hudson says. "YouTube has leveled the playing field for us. Our videos are actually getting seen by the general populace."

And some label reps fear attacking YouTube would be a public relations disaster, pointing to industry efforts to tear down Napster. The indie community is reticent to speak out against a site beloved by the people buying its music, and -- at least in the short term -- seems content to reap such sites' promo benefits.

"The major labels are still going to make a lot of these decisions," the head of one notable indie says. "We're sort of at the mercy of the brilliant long-term planning of the big industry players. Until they figure it out, and get their asses off their heads, I might be inclined to just go along and get as much promotional value out of these things as I can. We need to keep our bands at the front of the places where people find out about new music."