Warner brothers, record label for amongst others Madonna and James Blunt, have demanded their content be removed from YouTube unless they get a significantly improved royalties and advertising deal.
The development could have big ramifications for YouTube if other labels follow suit. Warner claim that less than 1% of their revenue is brought in by it's YouTube content. Considering YouTube's massive amount of music related content this figure makes the Google owned video site little more than an inconvenience.
According to an article in The Times a Warner brothers spokesman said “We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide,”
The article states "Negotiations between the two were characterised as tortuous, in part because YouTube cited the costs of hosting and streaming video as reasons why it could not pay more, hinting, again, at a lack of income.
Adding to the significance of the row is the fact that Warner Music was the first music major to sign a deal with YouTube, ahead of its acquisition by Google and at a time when the video-sharing website was at risk of being sued for copyright violation."
Essentially Warner Brothers have put the ball back into Google's court because ultimately they can demand YouTube stop any of their copyrighted content being posted on the site. Industry analysts have noted the timing of this announcement because the figures quoted by Warner Brothers do not include the revenure generated after new advertising system was introduced by YouTube. It is thought that Warner Brothers income from YouTube lags behind their competitors because they were one of the first to get a royalty deal from the site.
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