Warner removes music videos from YouTube
By Michael W. Jones
YouTube is finding that doing business with the music industry is not exactly a bed of roses. The online video leader has been renegotiating licensing deals with the big four major music labels. Negotiations for music video rights between YouTube and the Warner Music Group broke down late Friday. Warner, the third largest music industry label, removed all of its videos from the YouTube site this morning.
The Warner Music Group issued a statement relative to the negotiation breakdown this morning, saying “We are working actively to find a resolution with YouTube that would enable the return of our artists’ content to the site. Until then, we simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide.” Three other labels (Universal Music Group, Sony Music, and EMI) are continuing to negotiate with the Google-owned video service for music video rights.
The breakdown between Warner and YouTube comes at a time when it appears that YouTube is becoming a major source of revenue for the music firms. Rio Caraeff, Univeral Music’s digital division executive vice president this week said that the relationship between Universal and YouTube is a strong one and that the two companies are trying to expand beyond just music videos. Carareff told CNET News that YouTube has generated tens of million dollars for Universal this year, a dramatic 80 percent increase from the previous year.
Interestingly enough, the All Things Digital blog reported just this week that financial rewards were not nearly as high on the YouTube side of the deal. The post said that while the labels are starting to make money form the YouTube deal, the video site is not. YouTube, of course, has to pay the labels every time a video is viewed, even if the video site collects no revenue from the user for the play.
This points to problems with the YouTube revenue model for music videos, something that the company has been struggling with for some time. It is one thing for YouTube to become the Web leader in music videos, but apparently it is another thing entirely to make money at it. Still, Google has proven apt at building successful revenue streams elsewhere. With this much demand, they are sure to find a way to profit from the music video business.
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December 20th, 2008
Again, the industry doesn’t get it. Music videos date back to The Beatles and perhaps even much further back than that. The original intent of a video was to promote the group/artist and the song in other venues than radio.
If anyone didn’t notice, You Tube videos are not exactly high quality. Its not like someone is satisfied watching a low quality video and just be happy with that alone.
Fans go to watch the videos of their favorite groups and do purchase CDs and/or legal digital downloads and attend the concerts. Videos promote and create additional buzz for the artists and are not considered as a revenue stream of by itself.
Yanking videos off a You Tube hurts the fans and ultimately the artists themselves as they lose a key (and free source) of exposure.
Its not like the “old days” you could just dial up MTV and watch videos non stop. In fact there are no longer any mainstream 24 hour music video channels on satellite/cable anymore.
You Tube in many ways has started to become what MTV was 25 years ago, except it is now interactive with fans getting to choose what music videos they want to watch.
And since the videos have a watch count, the artist and the record label gets to see how many people watched that video.
I watched “In the Ayer” by Flo Rida on You Tube. That song alone had a seven million watch count. 7 million potential customers…what company would not want that? ( I think we know the answer to that one…)
You hear a cool song on the radio, you want your friends to hear it too. There is a video of the song, you email or text your friends with the link and they get to see and watch it too. (Its called word of mouth advertising…something that the music industry seemingly has no clue about).
Again, a lack of foresight by some in the industry ends up ultimately hurting themselves in the long run…
Sort of what happened to Metallica when they sued Napster. Instead of coming up with creative solutions like selling their content online or making deals with Napster….they ended up dissing their fan base in the process…which some believe they haven’t recovered from.
I guess history repeats itself….