Adverse affects for independent artists who do not sign up translate to adverse affects for non-subscribers that want to watch those artists on YouTube.
The record labels are completely right to be demanding better terms here, just like they would get from Apple, Spotify, Pandora, etc.
http://www.androidpolice.com/2013/11/27/apk-teardown-youtube...
i.e. By enabling the Android/iOS Youtube app to background (which they've gone out of their way to disable up until this point), it essentially becomes an audio streaming service with the same interface.
Plus according to the FT, the problem the indie labels have isn't with the subscription rate per se, its how the new ad tier is set up:
"One label boss said the big problem with YouTube’s new licensing agreement was not to do with the paid tier, but rather that it allowed YouTube to make substantial enhancements to its free tier. His fear is that YouTube’s free tier will become so attractive that it will reduce the number of people willing to pay for subscription services such as Spotify or Deezer."
I suspect Google is right today (at least for the many people who care about mobile music, since the data and/or storage costs would be prohibitive now), but I can also see how a label might not want to set too generous a precedent for tomorrow (on the assumption that bandwidth and storage might become abundant enough sooner than they're comfortable with).
It sets a very dangerous precedent for the value of music, which can be incredibly damaging for already struggling indie artists (not so much for the three majors who have received _massive_ advances)
Why not? Make it clear on signup that it's a premium service with guaranteed quality content, and x number of major labels are on board where you won't be seeing ads.
If there's actual value to users (and artists--their brands won't be associated with random ads) in something like this, there should be enough pressure to encourage these indie labels to agree to terms and go ad-free, no?
1. Youtube wants to offer users a subscription service with no ads.
2. Youtube needs to update its licensing/terms with artists: If a video plays for a subscriber they see no ads, artist gets money from subscription pool. If a video plays for a non-subscriber they see ads, artist gets money from ads pool.
3. Artists need to explicitly agree to these terms because it changes how and how much they'll get paid.
4. It doesn't seem fair for a user to pay a subscription, expect to see no ads, and then see ads for some video's because that artist/distributor did not agree to new terms. This is why Google wants all or nothing.