Online video streaming site YouTube is preparing to launch a subscription plan to charge users who want to watch music videos without advertisements, New Vision reported.
Currently, music videos uploaded by record labels are preceded by advertisements. The companies then earn by collecting a portion from the ads' revenues.
YouTube's subscription plan will of course draw the ire of most of its users, who widely use the site due to its free streaming service. But aside from the users, independent music labels also criticized the site.
According to Rich Bengloff, president of the American Association of Independent Music, record labels are being forced by the site to comply with the new plan's unfavorable terms.
Although YouTube did not release any details regarding the plan, Bengloff said indie music labels will not receive the same amount as what will be given to major corporations under the new plan.
Apparently, independent companies will only be entitled to a smaller portion of the revenues from the ads and subscriptions.
"It's awful that indies are being treated as second-class citizens by YouTube," Bengloff said.
In addition, YouTube has stated that companies who do not agree with the subscription guidelines will not be able to collect earnings from existing videos with ads, according to BBC.
This puts Bengloff and his colleagues in a bind since they rely on the popular site to promote their artists.
"We feel like since they are a monopoly, we need to be on YouTube," he said.
For Paul Verna, a senior analyst from the research firm eMarketer, YouTube is a successfully growing brand even without the subscription plan. For 2014, the site could earn around $3.2 billion in ad revenues alone, San Francisco Gate reported.
"There's no sign of slowing down," Verna said. "YouTube is like a brand. It's like Kleenex. People use it as a verb and completely associate YouTube with video online."
Although rolling out a subscription plan could potentially double the site's earnings, Verna believes getting users to go onboard with the new process will be a challenge. After all, its free video streaming service is what initially drew them to create their own accounts.
"YouTube has always been a free culture," the analyst said. "That's a very large obstacle. It's not to say they can't o it, but they really have to bring something to the table to cause people to think that this is really worth paying for."