YouTube's music service is running into contract snags with artists (updated)

Updated at 5:15 p.m. PST with confirmation from YouTube about its planned music service.

YouTube is prepared to block videos from a slew of popular independent artists who are refusing to sign up for its upcoming new music service, according to a Financial Times report.

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A YouTube music service has been rumored since October. The service is said to be a paid monthly subscription offering that will allow YouTube users to access the full library of music and music videos without advertising. But the service is also an attempt by Google, which owns YouTube, to capitalize on YouTube’s role as one of the largest music services in the world. Plenty of services already use YouTube’s library of licensed music videos to power their own music apps, too, such as the recently launched mobile music service Musx.

But YouTube wants all music artists to sign a contract permitting the audio portion of their videos to be used within the new YouTube music service — and not everyone is on board. About 95 percent of the music industry has signed up, but the remaining five percent that haven’t may include big draws like Jack White, Adele, and The Arctic Monkeys.

YouTube head of content Robert Kyncl told the Financial Times that the company is giving artists a good deal in terms of licensing fees, saying “We’re paying them fairly and consistently with the industry.”

Those that don’t sign up with YouTube on the new music service could see their videos blocked later this week, according to the Financial Times report.

Update: YouTube confirmed to VentureBeat its plans to launch a music service, and offered the following statement:

Our goal is to continue making YouTube an amazing music experience, both as a global platform for fans and artists to connect, and as a revenue source for the music industry.  We’re adding subscription-based features for music on YouTube with this in mind — to bring our music partners new revenue streams in addition to the hundreds of millions of dollars YouTube already generates for them each year. We are excited that hundreds of major and independent labels are already partnering with us.