YouTube will begin to remove music videos by artists signed to independent record labels that have not agreed to the new terms.
As reported in the Financial Times, YouTube - owned by Google - will be blocking videos "in a matter of days" as it prepares to launch its music subscription service. A spokesperson for the indie labels said YouTube were making a "grave error of commercial judgement".
Artists affected include big names such as Adele, Arctic Monkeys and Radiohead - who all belong to independent labels - as well as a number of smaller, local bands. The three major record labels - Universal, Sony and Warner - however have all agreed to the new terms.
As YouTube renegotiates contracts, they said they will be bringing "new revenue streams" to the music industry.