Warner Music Pulls All Content From YouTube
Unable to renegotiate the share of ad revenue it sought, Warner Music Group has pulled all of its content from YouTube. Affected are thousands of songs and artists from WMG’s extensive recording catalog, as well as, those published by Warner/Chappell Music who may not record for the company.
“We are working actively to find a resolution with YouTube that would enable the return of our artists’ content to the site,” Warner said in a statement. “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."
Rights holders receive a share of the revenue from ads that run alongside the video – usually just a fraction of a penny. But with YouTube traffic mesured in the billions those pennies could amount to real revenue. Last week a Universal exec claimed that the label group’s online video revenue could reach $100 million in 2008. Some insiders question the figure and point to drastically lower payouts.
COMMENTARY – WMG’s move puts YouTube in a difficult position. The company is known to be in renegotions with all four major label groups and Google exces have signaled that labels should expect less revenue, not more.
Despite the popularity of user generated videos, a YouTube with major holes in its music library would be a less compelling site. As YouTube aknowledged Friday on its blog, its also frustrating to users who suddenly get a take down notice for use of backgorund music. But WMG and other labels should think twice before walking away from what has become a top destination for music discovery.
WMG fired a bold first shot in what could become a bloody war to set a value for music online. Let’s hope this does not become another Napster with record labels overestimating their power or underestmating the rath of consumers who want what they want when the want it and in the digital age can find it somewhere else that doesn’t generate any revenue at all.
Just from personal experience on YouTube, I know there are a lot of videos that should be considered to be viral marketing tools by the labels instead of copyright infringements.
Glance at the comments of some videos and you’ll often see something like “WOW – what was the song you used? I gotta find it”.
It’s hard in my mind to justify removing these ‘social objects’ from the hands of the VERY MARKET the labels are after.
It is actions like these that have created such a cognitive dissonance within the minds of music consumers. The fact that these videos are user-generated represents a need within the market to create these social objects (expressive, user-generated, social content). The labels are outright ignoring this demand and saying “Please just go buy the song from iTunes and enjoy it by yourself.”
Music is an inherently social good, and any business that ignores this fact will alienate its customers and die a long, slow (but deserved) death.
Andrew, what’s your solution to the issue in this article? Everyone has an opinion but no solution. I agree that major record companies are reaping what they have sewn from previous decades of crooked business deals. But I’m just interested to see what each person would do if they (meaning you) were the CEO of the major record companies in these situations?
As a record producer/songwriter with several credits to my name, I am generating publishing to feed my family from these very songs you call “social goods”. I look at it from an economic standpoint, especially in our country’s current recession. Major record companies employ thousands of people in America, including myself. Many major label employees have families; so when there is no money being generated because labels aren’t protecting their products, and my publishing, how then do they meet their budgets and keep American people employed?
In my opinion music isn’t just some “social good,” it’s a way for thousands of families in this country to remain financially stable. We all know that people, mainly children, are not going to quit pirating music. So what is the solution? Labels join with cellular companies to create convenient ways for kids to download music to their phones for a fee and they still share files. So what’s the magic solution?
What would YOU do if you were the majors? Give majors your solution to how you would fix this never ending issue, in a way that would generate enough revenue to maintain salaries of employees who contribute to the overall stimulus of the American economy.
It seems to me to be about all about properly balancing short term profits with long term gains.
My gut says that labels and artists might do better focusing on the long term and try harder to encourage new services rather than fight them.
But I admit that’s just my gut. What do others think?
Bruce,
I totally agree….but do you really think they will shift gears, do an about face and start building new careers again?
Their business plan now is the same as it has been since 1994, maybe earlier: New acts are disposable, one single only, IF THAT…Old acts are the legacy to be violently protected and thrust down the throats of the young until the the kids can’t remember what their own generation sounds like…How much longer do you think it will take the boomers who run these companies to burry the future of music whilst eating their young?
One look at the Christmas music retail numbers this year and any sane person would know it has already been accomplished.
Embrace Young, Indie and Free…Reject Old, Fascist and Busted…
The baby boomers think hey invented Rock n’ Roll. Their plan is to take it to the grave with them….F That and F Them…
No Physical Future,
brendan b brown
wheatus.com
I expanded on this on my blog. I can think of 8 major reasons why this “Hulu for Music” will fail. Here is why: http://hitsingularity.wordpress.com/2009/01/01/8-reasons-why-a-hulu-for-music-will-fail/
Lets hope that the Warner comes to their senses on this one. This is NOT a good idea.