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Warner Music, YouTube Fail To Come To Agreement

July 21, 2009

Warner Music Group is seeking to sweeten its deal with Google Inc’s video-sharing site YouTube before renewing its licensing agreement.

Warner Music remains as the last holdout for licensing renewals among the industry’s top four labels.

Earlier this year, Sony Music Entertainment renewed its deal with YouTube, followed by deals with EMI Music and Vivendi-owned Universal Music Group, which is also in talks with YouTube over plans for a music video Web site, called Vevo.

YouTube was forced to pull the plug on videos from Warner Group artists, such as Madonna and Green Day, after failed attempts to come to an agreement in December.

Reuters reported that people close to the matter said that talks are still ongoing between Warner Music and YouTube, and “no imminent announcements are expected.”

Additionally, Warner Music’s chief executive, Edgar Bronfman, may be seeking to sweeten the music company’s deal with YouTube in light of a sluggish music market.

According to Rolling Stone, Warner Music is currently earning between $3-$8 of ad revenues per every 1,000-plus views, which is far less than the $25-$40 they are seeking.

Members of the music industry have been urging YouTube to provide an increase in licensing fees, said Reuters. Industry insiders see the video-sharing site as a heavy competitor to radio and television outlets for music sharing.

However, some analysts see YouTube as an example of lost opportunities to earn more from video streaming. The site streams millions of videos each day at no cost.

But YouTube public relations executives on Monday posted a “myth-busting” blog that characterized claims that only 3-5 percent of the site’s videos were used to generate advertising revenue as “old and wrong.”

“Monetized views have more than tripled in the past year, as we’re adding partner content very quickly and doing a better job of promoting their videos across the site,” according to the blog post.

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