YouTube has just signed an agreement with Universal Music Group and Sony Music over royalties and copyrighted material, Bloomberg reports. The deal reportedly solidifies better royalty rates for music rights holders and agrees to “stronger policing” of user-uploaded content. The third major music label, Warner Music Group, signed a similar deal with YouTube earlier this month.
A YouTube spokesperson confirmed the UMG deal in an email to The Verge. “We're thrilled to strengthen our partnership with Universal Music Group,” YouTube CEO Susan Wojcicki said in a statement. “This agreement means we can drive more value to the industry, break and support more artists, and deliver an incredible music experience to fans around the world.”
The new agreement is a good indication that YouTube’s rumored music streaming service is getting closer to launch. The launch of a YouTube music streaming platform was contingent on such agreements with major labels.
YouTube’s relationship with the music industry has been rocky in the past. The company has been criticized for not paying rights holders what they’re owed, and for allowing some copyrighted material to be posted without repercussion. In 2016, ad-supported streaming on free platforms like YouTube and SoundCloud brought in millions of dollars less than paid platforms like Spotify, according to Digital Music News. With the launch of a new music service, YouTube will enter an already crowded field late in the game. But YouTube has a huge audience, and can help with distribution where major labels might struggle.
“YouTube is not only going to build a fabulous subscription business to complement its advertising business, but it's going to work with the industry to help break their acts,” Lyor Cohen, YouTube’s head of music, said this summer.
Reportedly, YouTube’s streaming service will be a combination of Google Play Music and YouTube Red. The music streaming platform is supposedly planned to launch in March 2018, but YouTube hasn’t made any announcements. As Bloomberg points out, the company is set to enter talks with Vevo in 2018.