WMG Purges YouTube

Unable to close a new deal over licensing fees, Warner Music Group has ordered YouTube to remove content belonging to the record label.

Music videos by Warner artists started vanishing from Google-owned YouTube Dec. 20, although many Warner artists still had a presence on the mega-popular video site as of Dec. 22.

WMG recording artists affected by the purge include Madonna, Metallica and Kid Rock.

Photo: Justin Brady
Rose Garden Arena, Portland, Ore.

YouTube notified users of WMG’s decision Dec. 19, saying it would continue to work with labels and artists to reach “user-friendly licensing agreements.”

Meanwhile, WMG said in a statement that it “simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide.”

The major labels reached agreements with YouTube two years ago calling for a per-stream fee as well as a piece of the advertising revenue pie. When it came time negotiate a new contract, WMG and YouTube could not agree.

Evidently, the impasse centered on whether WMG should be paid up front for its content or if the label should be compensated after videos are viewed on YouTube, the New York Times reported.

What does WMG removing its content from YouTube mean for the video site?

According to measurement firm Tube Mogul, six of YouTube’s top 10 offerings are music videos.

“YouTube owes much of its popularity, and ad revenue, to the fact that a user can find almost any music video there,” Tube Mogul marketing manager David Burch told the Times.

The newspaper also quoted an anonymous executive described as “close to Warner Music,” saying less than 1 percent of the label’s reported $639 million in digital revenues came from YouTube’s ads and fees.

“If we don’t get this business model right,” the executive told the Times, “it’s going to be a lot harder to fix down the road.”