The Financial Times reports that YouTube's rumored streaming music service has hit a crucial milestone this week by locking down a deal with Merlin, the network that represents the licensing rights for a huge swath of indie labels.
Over the summer, negotiations between YouTube and many important indie labels broke down. The labels complained that they were getting a raw deal from YouTube. To coerce labels into playing along, YouTube began threatening that it would block indie label videos if they refused.
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The details of the deal are still hazy, but what's important is that it sets the stage for a launch of YouTube Music Key—or whatever this new service will be called. [Financial Times]