Google isn’t just being a little bad in their contract negotiations with indie labels. In a leak to Digital Music News, it proves to be the worst contract I or anyone I’ve talked to has ever seen, for anything music-related. It puts the “boiler” in boilerplate.
If this leaked contract is what Google still stands by, and current analysis in the music press is correct, the deal is deeply unsettling. It blurs the lines between free and premium services by placing them all under a single contract. YouTube and its Spotify rival would be under one deal. It sets rates independently for smaller labels based on a single, not-very-good fee. And then it protects Google from any action that would stop unauthorized or pirated uploads to their services.
I can sum it up roughly this way, unless I’ve seriously misread the terms and their intentions:
Sign this contract. It covers everything Google does – free (like YouTube) or otherwise. It lets us specify license terms and royalty rates, not you, and not any organisation that represents you. It gives us rights to all your music, and all your music videos, and everything else. It gives us rights to pirated music and videos other people upload, too. And you promise never to sue us.
(and another thing.) Sign it, or we’ll ban you from YouTube for your own content.
The key sections to watch out for: not only is there a “do not sue” covenant that prevents labels from protecting their own content, but it merges free services (apparently including YouTube) with the upcoming premium ones. At the very end, you’ll also find the royalty rates that had frustrated indies, which are reportedly lower than those they had gotten from other sources and lower than what majors had been offered. (The numbers are now out there for discussion.)
But the real surprise here is the lawsuit immunity provision. It’s easy to understand why Google would want it; it’s just that if they succeed in forcing labels to sign, it’s a fairly ugly development. It was already shocking enough that Google would hold hostage music uploaded by artists and labels to YouTube just to get preferential terms for the company on its premium service. It’s even more shocking that it would protect non-authorised, pirated content in the same contract, blurring premium and free services.
Or, as The Register more succinctly put it:
…the move will preserve Google’s illegal supply chain by cracking down on its legal supply chain.
Unless Google can explain otherwise, that is, the current understanding is that Google is threatening legal content that follows its terms of service, as part of a contract that would protect illegal content that violates it.
That’s a low not even the likes of Napster or Megaupload or Pirate Bay ever reached.
Google might not have to block labels and artists from YouTube. If this remains their negotiating contract with indies, those musical entities would be well advised to abandon Google’s services of their own accord.
And if this is all wrong, and this isn’t what Google is offering – or if it is, and they have a change of heart – the company needs to quickly get out in front of the music community and public with better terms.