Way back in the dark days of 2006, video sharing service YouTube inked its first commercial video deal with Warner Music Group, which agreed to offer music videos, interviews, and other original programming via the service. The deal enabled Warner to receive royalties and advertising revenue from Warner Music Group Videos on the site—even those uploaded in violation of copyright, if Warner chose to authorize them—and individual artists would be able to opt out of the deal if they chose. The deal was a major coup for YouTube…and shortly thereafter Google swept in and bought the company for $1.6 billion.
Now, the arrangement has gone sour, and Warner Music Group has demanded YouTube remove all videos from its artists from the service. Industry sources indicate Warner Music has been deeply disappointed with revenues generated from its content on YouTube and was seeking an increase in its revenue share. In a statement distributed via email, Warner said “We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels, and publishers for the value they provide.”
YouTube still has distribution deals with Universal Music, Sony MUsic Entertainment, and EMI (the other “major” music distributors) as well as a number of independent publishers and labels.
