Jan 27, 2015 · 6 minutes

In 2013, Jason Calacanis wrote a post titled, "I ain't gonna work on YouTube's farm no more." In it, the media entrepreneur detailed how, despite being one of the top funded YouTube creator partners, he turned down the platform's money when it was time to renew his contract.

Many thought he was crazy to reject cash from the largest online video distributor on the planet. But if the claims made about YouTube's new partner agreement in a blog post by cellist Zoe Keating are true, it may have been a smart move after all.

First, some background on Keating's post: YouTube is launching a subscription streaming music service not unlike Spotify or Rdio called "Music Key." Last summer, the Google-owned video platform took heat for allegedly bullying independent labels and artists into agreeing to below-market royalty rates, with the threat that their content would otherwise be removed from YouTube's previously free, open platform. YouTube rightly reversed course on that decision, but the new agreement it's now offering to YouTube Partners is even worse.

The terms of the new agreement, while logical from YouTube's perspective, place huge restrictions on where and how a musician can host their music on both YouTube and other platforms. And the bullying hasn't stopped. Keating wrote that, if she refused to sign the new YouTube music services agreement, her channel, which has over a half a million views and close to 5,000 followers, would be blocked from the monetization portions of the platform.

According to the new agreement, anything Keating uploads to Youtube will be automatically included in the Music Key subscription service. And it's not just Keating's uploads. If she chooses to withhold anything from YouTube, but a third party subsequently uploads it, including her name in the description, it will also be added to Music Key. Not that Keating would have much incentive to withhold music -- anything she releases on another platform, like Bandcamp or iTunes, must be uploaded to YouTube at the same time, per the terms of the new contract.

That particular provision is one that should be a real deal-breaker for many artists. Taylor Swift and Beyonce, arguably the two most popular recording artists today, both released their most recent albums on iTunes exclusively before any other tech platform and sold 617,000 and 1.2 million copies respectively in the first week. Given that Swift has already pulled her catalog from Spotify, it's clear that she would gladly forgo the longterm streaming royalties she would receive from a subscription service in favor of the windfall she made off iTunes.

But unlike Keating, Swift isn't a YouTube Partner. She distributes her music on YouTube through Vevo and has an entirely separate contractual agreement that, considering it was negotiated with a label and acknowledging Swift's popularity, is likely much less onerous than the one offered to independent artists like Keating.

The agreement also states that all of Keating's videos, along with any third-party uploads of her songs, will be "monetized," meaning there will be pre-roll ads placed ahead of them -- or as she describes them, "Doritos ads." This is hardly in the spirit of artist control nor YouTube's ContentID feature, which spots when an artist's song has been used in somebody else's video. Normally, when an artist discovers their work has been uploaded by somebody else, they have three choices: Issue a DMCA notice to have the video taken down, monetize the video by allowing ads, or do nothing. ContentID is a reasonable, if imperfect, system that prioritizes artist control over all else. But going forward, if Keating doesn't feel it's right to force ads onto, say, a mother's video mashup of her son's sporting achievements set to Keating's work, she has no choice.

Moreover, the contract lasts five years, which is long by industry standards -- the Musicians Union recommends not signing any contract that lasts over three years.

But perhaps the worst element of the contract is that, unless she signs, not only will Keating lose the free promotion and analytics that she currently receives as a YouTube partner, but she won't be able to monetize through ContentID at all. Even if this "monetization" is only pennies for many artists, and even if they have to share those pennies with YouTube, the notion that artists will be paid literally nothing for their work unless they sign an onerous contract is egregious. Hell, I could upload a song I wrote to that most-despised service Spotify right now through a service like TuneCore and theoretically make money off it without signing an insanely restrictive contract. (The number of listens would likely be so low that the royalty amount would be less than the cost of the paper check it was written on, but that isn't the point).

And again, if Keating refuses to comply with any of these stipulations, her channel, and the audience she's spent years building and who expect to see her work on YouTube, will be eliminated, per YouTube's latest demand. With this, YouTube has gone from the most artist-friendly major music platform on the planet to the least.

Granted, there's an argument that Keating has overstated her plight. When I first read the article, I initially interpreted it to mean that she would lose all her videos and be barred from having a YouTube channel entirely. It doesn't. Instead, it means that Keating will no longer receive the free promotion and analytics tools offered to her as a YouTube partner, nor will she be able to use ContentID to monetize her work. Losing the first privilege is understandable -- if YouTube gives you free promotion, then you'll have to play by YouTube's contractual rules. It's unfortunate, however, that independent artists like Keating lack the leverage and lawyers to negotiate better terms with YouTube. I guarantee YouTube isn't making the same demands of Warner Bros Records -- they'll screw over their own artists themselves, thank you very much.

But the denial of monetization rights is, again, ridiculous. It's as if iTunes said to everyone who's ever uploaded a track to its service, "Hey nevermind, we were giving you 30 percent of the revenue from your sales but now we're going to give you nothing unless you agree to this terrible contract." A reasonable compromise would be to take away the promotional and analytics privileges of being a YouTube partner, but still allow Keating to monetize her work through ContentID.

For many years, YouTube has been a magnificent service, giving anybody on the planet the opportunity to upload their work, control how it's used, and even make a little money, which they share with YouTube in return for hosting their songs. It decentralized distribution, cutting out middlemen like labels which allowed completely independent upstarts like Macklemore (I know, it's Macklemore, but from a business perspective it's an instructive case) to make a career on their own terms. But now YouTube is re-centralizing that model and exerting its power against independents who lack the leverage to negotiate better terms.

Of course, Calacanis was only half-right. YouTube is fast becoming a unfriendly place for independent artists who would like, as all of us do, to make a living off their work. But for big labels or multi-channel networks, YouTube is still lucrative, having become part of the same capitalist machine that has screwed over artists for years while making their well-lawyered "representatives" rich.

YouTube is still an essential promotional tool. It's become so synonymous with "online video" that creators can't afford to pull their music completely. But it's time for artists to rethink their YouTube strategy. Think of it as that promotional tool but nothing else. Don't allow your entire catalog to live on YouTube -- post some of it and guide people to other, more flexible platforms like Bandcamp where you can pocket some change for your work without selling your soul. And after achieving a certain level of notoriety, don't assume you have to stay on YouTube or to allow others to post your work, especially if you're not getting paid for it.

All of this makes YouTube a less exciting place for consumers and creators, but this is the world YouTube has chosen. Maybe those freer platforms like Bandcamp can subsume the role YouTube once played -- that is unless Bandcamp gets so huge that it starts screwing over artists as badly.

[image by Brad Jonas]