YouTube might be facing the threat of litigation from Universal,
but another record label, Warner Music, has forged an agreement
with the video sharing site.
The deal calls for YouTube to deploy a new technology to flag
videos running on the site that are owned by Warner Music, and then
pay Warner a cut of any ad revenue for ads displayed in conjunction
with those videos.
With the agreement, the companies appear to have forestalled a
thorny copyright battle; the deal allows both YouTube and Warner to
profit from the videos, while not depriving fans of access.
Of course, so far Warner has been a major brand supporter of
YouTube, so it makes sense that Warner's invested in seeing the
video sharing site succeed. Warner earlier this summer promoted
"Pirates of the Caribbean" on YouTube, becoming the first major
brand advertiser to run display ads on the site. Additionally, last
month Warner became one of the first record companies to use a new
YouTube ad platform to promote an upcoming album--"Paris," the
debut effort from the socialite-singer Paris Hilton.
But YouTube's not in the clear just yet. The agreement with Warner
comes as Universal has been threatening to sue YouTube and MySpace
for "tens of millions" of dollars for copyright infringement.
Universal remains in talks with the site, but the state of
negotiations remains unknown. In fact, Universal's gripes with
YouTube seem broader than most copyright complaints. Universal is
concerned that YouTube is using Universal's content to build its
own brand name.
But this conclusion is debatable at best. In fact, it appears far
more likely that the opposite is true: Content owners are using
YouTube to build their own brands.
The most recent example happened last week, when the creators of
Web soap opera "LonelyGirl15"--which built a devoted following on
YouTube--said they were taking their show to YouTube rival Revver,
where they stand to get a 50 percent cut of all ad revenue. Before
Universal concludes that it's being harmed by copyrighted material
on YouTube, it should reconsider who's really benefiting from
exposure on the site.