Universal and Sony agree to global licensing deal for new YouTube streaming service

YouTube has taken a huge step towards getting its new Spotify-style streaming service up and running, with the remaining major labels agreeing to terms.

Bloomberg reports that both Universal Music Group (UMG) and Sony Music Entertainment (SME) have agreed to deals to establish royalty rates between YouTube and rights holders for music videos and user-uploaded clips.

This is set to pave the way for YouTube to launch their streaming service, currently working with a title of ’Remix’, in the first quarter of 2018.

UMG and SME join Warner Music, who had already reportedly signed on for the new platform in May this year.

According to MBW, all three of the agreements will also cover a renewal of Vevo’s exclusive partnership with YouTube.

“This important step forward provides our recording artists and songwriters improved content flexibility and growing compensation from YouTube’s ad-supported and paid-subscription tiers, while also furthering YouTube’s commitment to manage music rights on its platform," said chairman and CEO of UMG, Sir Lucian Grainge.

Sony’s Tokyo-based parent company declined to comment.

YouTube look set to enter a market competing with established streaming services Spotify and Apple Music who’ve already secured 60 million subscribers and 30 million subscribers respectively.

YouTube has received scathing criticism from the music industry for two of its prickliest issues – not paying its artists enough, and not doing anything to get rid of copyright infringing user-uploaded content on its site.

YouTube has tried to rectify this with increased payouts and revenues through new subscription service offerings as Music Key in 2014 (which became YouTube Red in 2015) and Google Play (both Google and YouTube are owned by Alphabet).