"crappy licensing deal" doesn't really indicate an even article.

Basically same as everyone else they are siding with the labels and adapting their narrative.

Yes, if Youtube can't licence the music the videos will get flagged by ContentID, which means they gets "blocked" because they don't have the license to show them, it's a semantics play and circular logic that the labels are offering and as with most attacks on Google the media has lapped it up.

As to the actual term we only have the labels' word on it and they are an interested party in the midst of negotiations.

Edit:

This spells out that it's a "renegotiation" process, the labels want more from the free streaming to agree to the paid one: http://www.bbc.com/news/technology-27891883

And: "content from artists signed to independent labels will remain available on YouTube via channels such as Vevo".