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Warner Music returns to YouTube

Big four labels in the sack

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Warner Music is returning to YouTube after a nine-month blockade over licensing.

The music label has agreed to return its full catalog to YouTube in return for more control and a larger cut of advertising. The new accord gives Warner the right to sell its own ads on "enhanced" channels devoted to WMG artists as well as against user-generated videos using WMG songs in their soundtrack. Ad revenue will be shared with YouTube, with WMG keeping the bulk of the cash.

Warner said its content will return to YouTube "as early as the end of the year."

By setting its own price for ads, Warner hopes to improve on the slim margins it has accused YouTube of dolling out. The label began yanking its videos from the video-sharing site late last year when licensing negotiations between the two broke down.

The new deal could potentially complicate YouTube's existing pact with Universal Media Group, which included the creation of Vevo, a satellite "premium" music video site, set aside from YouTube's usual user-generated rabble. Universal's big plan is to convince other record labels to join Vevo, but with Warner's new power to sell and customize its artist channels, there now appears little reason to move away from the YouTube site proper. So far, Universal has signed only Sony to hook into Vevo.

YouTube has always publicly responded to the whims and tantrums of record labels by guardedly stating that music licensing is "complicated." With Warner back, the Google-owned website now has all four of the major labels in its stable, but it has much less control of the cash flow they generate than when it first decided to crawl into bed with the industry rather than be sued into oblivion. ®

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