YouTube to Block Music Videos From Smaller Labels

Google Inc. (GOOG)’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 percent 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.

Google, competing with music services from Apple Inc. and Amazon.com Inc. (AMZN), 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 on 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 SA (VIV)’s Universal Music and EMI Group, Sony Corp. (6758)’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 Mountain View, California-based Google, the service should be available to the public by September.

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Rob Golum, Anne Reifenberg

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