According to Dawn C. Chmielewski from The Times, there is a breakdown in the talks regarding renewal of contract between Warner Music Group and You Tube. Following this, a lot of label content has been scrapped from the video sharing site.
All you can find on the Warner Group channel on You Tube is an empty video screen. Users can however access a lot of videos on Warner Music Group’s site Nickelback and My Chemical Romance.
There is an announcement from You Tube that Warner Music Group’s content will be disappearing from the site. It is not clear as to who walked out of the deal – Warner Music Group or You Tube says Chmielewski.
He goes on to say that in the year 2006, a one of the first licensing deals was stuck between YouTube and Warner. According to Warner executives, this co operation helped legitimizing the video site and the stage was set for Google Inc.’s acquisition of YouTube Inc. for $1.65 billion.
Originally, Sony BMG Music Entertainment and Vivendi’s Universal Music Group, Warner, became small stake holders which came as a package with the video-music licensing deals.
YouTube contract terms stated that these labels will either split revenue generated from advertising or collect a minimum amount less than a penny as a fee for watching music video, whichever is more.
We have to wait and see the impact this has on WMG’s income potential. According to an exec from the Universal Music Group in a CNET story, millions of dollars have been generated by the label in tie up with YouTube.
