Deal or no deal: Why talk is cheap when it comes to digital music contracts


It’s easy to look at Warner’s YouTube deal and conclude that the music biz’s tough talk on the ‘value gap’ was just that: talk.

Certainly, WMG CEO Steve Cooper didn’t make much effort to hide his disappointment in his internal memo (seen by Music Week) announcing the deal, describing it as "the best possible deal under very difficult circumstances".

And, while you can see why Warner’s previous experience of going dark on the world’s biggest video streaming platform would make it seem futile to not get some kind of contract signed, it’s impossible for the wider world to view such deals in isolation, even if they have to be done that way.

So every time the biz licenses YouTube on terms it’s not happy with, it risks undermining their central point that YouTube should pay as much as other platforms less prone to hosting unlicensed music.

It may also suggest that YouTube’s own central claim to add promotional value beyond its monetisation worth might just have some truth to it – but that’s a matter for another editorial.

Warner’s Spotify deal could well be next out of the gate. So will the major's seemingly less-than-satisfactory YouTube negotiations cast a shadow over that? Or have Universal and Merlin’s deals with Spotify – which allow premium windowing, reportedly in exchange for lower rates – somehow framed everyone else’s talks?

There's even a global dimension nowadays. Does Universal's deal with China's Tencent, as reported by Music Week yesterday, raise the bar for the levels of cooperation and business synergy between labels and digital service providers?

And then there’s Apple. As the two-year anniversary of Apple Music looms, many deals with the platform could be coming up for renewal. Will Apple look at the terms apparently being offered to the market-leading, but less rich Spotify and try to drive its own rates down?

With a forest of NDAs surrounding the opaque lake of such deals, we may never know the details. But one thing’s for sure: for many, the biz’s actions will continue to speak louder than its words.

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