In the wake of stalled contract negotiations, Warner Music Group on Saturday demanded that YouTube remove its music videos from the popular video-sharing site.
Warner Music has posted thousands of video clips from artists like rapper TI and the Red Hot Chili Peppers on YouTube. Warner reportedly wants a larger share of the revenue YouTube is generating from its visitor traffic. According to comScore’s October data, YouTube has more than 100 million viewers in the United States.
“We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide,” Warner said. However, it is not clear what terms Warner is demanding.
A Significant Revenue Stream
Warner has a long and supportive history with YouTube. Warner Music, Sony Music and Universal Music bought small stakes in YouTube before Google acquired the company for $1.65 million in October 2006. The three major labels buying into YouTube gave the then-fledgling site legitimacy, and the relationship appears to have been profitable.
In addition to the revenues Warner, Sony and Universal gained when Google purchased YouTube, the labels are beginning to see the promise of revenue streams from allowing their videos to be posted on the site. In fact, Universal Music has reported revenues of nearly $100 million on YouTube since 2005.
“Universal has a huge presence on YouTube,” said Greg Sterling, principal analyst at Sterling Market Intelligence. “It’s not purely promotional. It’s a significant revenue-generating channel for them. So Warner’s announcement is striking against that story.”
YouTube: Parting Is Such Sweet Sorrow
Reuters cites a source familiar with Warner Music’s talks as saying the amount the music label has been receiving from YouTube is “staggeringly low.” YouTube was not immediately available for comment, but the company has posted a statement on its blog about the difficulties of music licensing.
“Despite…