YouTube loses its groove

Posted on 22 Dec 2008 at 18:14

YouTube has been ordered to remove all music videos by Warner Music Group artists as negotiations between the video-sharing site and the record label broke down. The order could mean that hundreds of thousands of videos clips will be removed from the site.

The record label represents artists such as the Red Hot Chili Peppers and rapper T.I.

YouTube also has agreements with Universal Music Group, Sony Music Entertainment and EMI Music, and Warner's move could see them also making tougher demands for higher fees too.

This could leave YouTube in a difficult position as it tries to balance the need to pay a reasonable fee to content partners - such as TV and movie companies - and also generate enough return on the substantial investment needed to keep streaming millions of videos around the world.

Warner Music was the first major media company to negotiate a deal with YouTube, back in 2006. The talks fell apart as Warner wants a bigger share of the YouTube's revenue.

"We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide," Warner Music said in a statement.

YouTube showed no signs of backing down, acknowledging that its partnership with Warner has been successful until now, but maintaining that the site prepared to move on without it.

"Despite our constant efforts, it isn't always possible to maintain their innovative agreements," YouTube site said in a statement. "Sometimes, if we can't reach acceptable business terms, we must part ways with successful partners."

Author: Dawinderpal Sahota

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