Mountain View (CA) – If you are used to watching your favorite music videos via YouTube, then you might be surprised to find that task is going to become much more difficult. Warner Music said in a statement that it “simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide.”
Because Warner Music Group and YouTube have yet to come to a licensing agreement, Warner demanded that thousands of the company’s videos be removed from Google owned YouTube.
YouTube notified its users that it would be removing Warner Music content – including user-created and generated videos which use Warner music – via a blog post on Friday. The company promised that it would continue to work closely with record labels and artists in an effort to come to “user-friendly licensing arrangements”.
On Saturday, Google obliged and began removing the videos from the site on Saturday.
Google plans to expand its video advertising business so this could potentially be a new source of tension between the company and media companies, because they will not be sharing their content if they are not receiving agreed upon compensation.
Even though YouTube is the most popular video-sharing site globally, much of its popularity is due to the broadcast of music videos. Six out of ten of YouTube’s most popular videos are music videos. Eight billion views that YouTube receives are based on content from musicians and record labels.
Two years ago, Warner Music, Universal Music, Sony BMG and EMI reached licensing agreements with YouTube. According to the terms, the labels would receive a small fee per stream for each of the company’s videos that are viewed on YouTube and would also be able to receive a share of the ad revenue.
The tension comes from the inability to determine whether or not labels should be paid in advance, or after the videos are viewed.
As CD sales begin to diminish, revenue from digital media which includes electronic downloads of songs and the streaming of ad supported music videos is increasingly important to record labels. During the fiscal year ending in September, Warner Music reported $639 million in digital revenue.
Warner said it will continue to distribute content through other websites such as AOL and MySpace Music. Artists will continue to have their music streaming on their own websites as well.
There is no indication as to when Warner Music and YouTube may come to an agreement.