What you are reading (and reacting to) here is part of the negotiation tactic of one party trying to force a better deal out of the other.

Accounting to the cited FT article, the issue isn't about the yet to be announced music service, rather that these "indie labels" are trying extract higher rates for the free streaming that is already available.

Regardless of why this is becoming public, we would still only benefit from a YouTube competitor.

Would we? Competition is good but fragmentation is bad. If I want to stick on a playlist of 10 songs and half of them are on YouTube but the other half are on DomainNameAbu.se that's not good for me as a user.

Absolutely, but I would be great to see some more competition in this space.

Really, where? I didn't see that in the FT article at all.