Culture

Warner Music pulls videos from YouTube

by Mary Richard | December 22, 2008 at 12:37 am

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NEW YORK (Reuters) - Warner Music Group ordered YouTube on Saturday to remove all music videos by its artists from the popular online video-sharing site after contract negotiations broke down.

Talks broke down on Saturday because Warner wants a bigger share of YouTube's profit. "We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide," Warner said in a statement.

YouTube has over 100 million viewers in the US alone.

The music companies typically get paid a share of any advertising revenue associated with the video and a per-play payment for every video viewed. The per-play fee is usually a fraction of a penny and with millions visiting YouTube everyday it was all expected to add up to a substantial amount.

But a source close to Warner Music said the amounts it has been receiving from YouTube is "staggeringly low."

YouTube executives have spent most of 2008 stepping up efforts to develop revenue streams on the site partly in a bid to keep content partners happy. It has been in long negotiations with Warner on how best to split revenues until things came to a head in talks on Friday.

YouTube has a December 19th posting on their blog concerning this problem.

We work with the music industry worldwide -- with major and independent labels and publishers, rights collecting societies, and with artists and songwriters directly -- to build user-friendly licensing arrangements. With these partners and our cutting-edge Content ID technology, we've created a win-win situation the likes of which never existed before YouTube: a system that gives artists a brand new revenue source and a great way to connect with their fans.

That said, despite our constant efforts, it isn't always possible to maintain these innovative agreements. Sometimes, if we can't reach acceptable business terms, we must part ways with successful partners. For example, you may notice videos that contain music owned by Warner Music Group being blocked from the site.

The demands could leave YouTube in a difficult position as it tries to balance the need to pay partners, including TV and movie companies, and also generate enough return on their investment needed to keep streaming millions of videos around the world.