IP Democracy: YouTube to Get Some Cash from Warner Music

YouTube, the hot-hot-hot video sharing site, may finally start making some money off of its phenomenal web traffic. Warner Music has agreed to distribute its songs and music videos via YouTube under an ad revenue sharing deal. Here’s the interesting but somewhat-vague part of the pact: Warner will license not only the videos and music that it directly contributes to YouTube, but it will also license homemade videos that contain the company’s licensed music.

I’m not sure how that will work but reports says that YouTube has developed a “royalty-tracking” system that will detect when homemade videos contain copyrighted music. Warner will be able to review these videos and then approve or reject them.

This is a very smart move by Warner Music because it shows that at least one record company can learn from its past mistakes. The fight and ultimate victory against P2P file-sharing of music by the record industry was a years-long battle against the inevitable tide of technology and along the way the sale of recorded music got torched. How much better it would have been had the recorded music industry recognized the staying power of Internet-shared music and jumped on the bandwagon sooner rather than later.

The permanent transformation caused by YouTube and other video sharing sites, hasn’t gone unnoticed at Warner Music, at least.

“Technology is changing entertainment, and Warner Music is embracing that innovation,” said Warner Music Chairman Edgar Bronfman Jr. “Consumer-empowering destinations like YouTube have created a two-way dialogue that will transform entertainment and media forever.”

The same thing can’t be said for Universal Music, which is betraying the same-old mindset that got the record companies in trouble in the first place. In a bit of bad timing, Mark Cuban put up this item yesterday proclaiming the end of YouTube because, among other reasons, “…you can pretty well bet that every and any copyright owner is going to be jumping up and down telling Youtube to remove every bit of content with any copyrighted material.”

Posted by Cynthia Brumfield on September 18, 2006 7:19 AM to IP Democracy