Real Big Firm

Videos from Warner Music recording artists (Madonna, Metallica) are being removed from YouTube because of a breakdown in licensing negotiations between the two sides.

There’s been some he said/she said as to who is at fault, with both sides issuing statements. AllThingsD reports that both sides were close to a deal when Warner changed the terms, and in response Google made the decision to pull Warner music videos. According to The New York Times, the deal between YouTube and Warner expired many months ago (YouTube’s deals with other major music labels including Sony, Universal and EMI will be expiring soon). Of course, this is all probably a ploy, as one side tries to wring better terms out of the other (see NBC v. Apple), and neither side appears to be in any rush to yank the content, as Madonna and Metallica’s YouTube channels are still up.

The Times also notes that Warner reported $639 million in digital revenue for the fiscal year that ended in September and less than 1 percent of that was from YouTube’s ads and fees, which would be less than $6.39 million. Earlier this week, Universal Music said that it was making “tens of millions” in revenue from YouTube.

Obviously it’s in YouTube’s best interest to keep music videos on the site. Six of the top 10 videos of all time on YouTube are music videos, and just days ago YouTube launched a special music section on the site to make it easier for people to find videos and music-related content. And it’s in the labels’ best interest to keep their videos up on YouTube, as it has become a defacto MTV for an entire generation, and it could become honest-to-gosh music television as more set-top boxes become YouTube-enabled (and stream in 720p to the TV).

And sure, people could just Google their favorite music video, but YouTube now accounts for 25 percent of all Google searches. Why scatter those people around the web when you could concentrate them on one site and ideally increase the total number of videos played?