YouTube ordered to pull Warner videos – more labels may follow

23 Dec 2008

Popular video-sharing site YouTube has been ordered by entertainment giant Warner to remove videos of top artists such as Madonna, R.E.M. and the Red Hot Chilli Peppers because of a spat over money.

Warner has told YouTube to remove music videos of its artists from the site due to a breakdown in contact negotiations.

A landmark deal between YouTube and Warner in 2006 led to similar agreements between other big labels such as Universal, Sony BMG and EMI Music.

Soon after, YouTube was bought by Google for a whopping US$1.65bn.

However, Warner doesn’t believe it’s getting its fair share of the revenues, and contract negotiations have broken down, with an edict by Warner demanding videos of its top artists be removed.

While Warner is still keen to reach a settlement and its channel is still live on YouTube, it is understood that the disagreement with YouTube centres on its share of advertising revenue.

Warner gets a share of revenue per video played. However, the rate agreed by Warner in 2006 is, by today’s standards, considered very low, and the label wants to bring the matter up to date.

Warner has stated: “We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide.”

YouTube is one of the internet’s most successful websites with over 100 million videos viewed very day and some 13 hours of new videos uploaded every day. YouTube’s bandwidth costs are estimated at US$1m a day.

The latest spat with Warner has been preceded by a high-profile legal battle with US entertainment powerhouse Viacom, which resulted in an agreement last July whereby YouTube has to hand over viewer usage files to Viacom lawyers.

But the popular site has continued to evolve, and in recent months struck deals with MGM, CBS and Lion’s Gate Entertainment to companies to post full-length films and television shows on the site accompanied by ads.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years