Warner Music Negotiates More Control in New YouTube Deal

YouTube has just held a conference call to announce that it has negotiated a deal with Warner Music Group (WMG), the major record label that pulled off the world’s most popular video portal after feeling shortchanged by the revenue its videos were driving. Many details of the deal have been rumored for the last few days, and were confirmed accurate: WMG will be putting its full catalog back on YouTube and will have the ability to sell its own advertising against both its premium music videos as well as user generated content that features a WMG song. Revenue will be shared with YouTube but most will be going to WMG. The deal also includes rights to Warner’s Chappell Music publishing arm.

The deal could prove to be a sign of things to come for YouTube’s premium content, especially since the site has left the door open to special branding on Warner’s music pages that would make it clear who the content owner is. YouTube says that it’s working with WMG to define the optimal experience for the user and the artist, and this may well wind up looking significantly different from YouTube’s standard viewing page.

That may be bad news to VEVO, the satellite “Hulu for music videos” site that’s currently being built by Universal Music Group in partnership with YouTube. Sony (SNE) has signed on to distribute its content through the site, but EMI and Warner are hold-outs. VEVO is supposed to give users a more fleshed out music video experience, while giving the labels a better controlled and more appealing place to sell advertising against their videos. But given the new abilities being granted to Warner with today’s deal — including the right to customize the page layout and sell its own advertising — Warner now seems to have even less of an incentive to join the VEVO initiative than it did before.

That spells trouble for VEVO, because the site will really only be appealing if it can get all four labels on-board. Even if VEVO turns out to have a great viewing experience, that’s really only half the battle — users are more likely to go to a site that has the music video they want every time than they are to one that’s hit-or-miss. Of course, the site most people will turn to will be YouTube itself, which does feature videos from all four labels (MySpace Music does as well).

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Comments

[CGP:]

As long as everything is seamlessly linked (searchwise etc.) on whatever page you're on, I don't see a major issue for Vevo.

When I do a search on Hulu for an ABC show it'll redirect me to ABC; a little inconvenient but I don't care ultimately, I get my show or clip (btw ABC ur annoyingly repetitive with your roll ads).

Sep 29 01:50 PM

[GeorgeS:]

What interests me is rare music that's posted by users. Labels would not be presenting those in their official channels. I'd like to see a plan where those uploaders could be accepted and share in revenue, like a "distributor fee". It should be split equally, and Google should make sure it's fair.
But the battle will be when labels try to screw everyone, offer a couple pennies, and maybe want to charge the uploaders to be part of it. They would kill it, predictably.

Sep 29 09:19 PM