Warner Licenses Music to YouTube

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YouTube's model just got validation from Warner Music, which will announce a revenue share partnership with YouTube today. The deal not only allows Warner Music to receive royalties on music they upload, but also for music uploaded by fans:

Perhaps even more important for YouTube is that Warner Music has agreed to license its songs to the millions of ordinary people who upload their homemade videos to the Web site.

To make the deal happen, YouTube developed a royalty-tracking system that will detect when homemade videos are using copyrighted material. YouTube says the technology will enable Warner Music to review the video and decide whether it wants to approve or reject it.

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This is the first time I've

This is the first time I've really looked into all this, it does indeed seem like a positive thing.

Business Week has a good summary of the bloody battlefield that this deal is arising out of: Sour Musical Notes on YouTube, MySpace. Many lawsuits still seem possible from the old school industry, who are just looking for their piece of flesh and can't quite figure where to carve.

As we've all long felt, unlicensed distribution at the fan or buff level (versus the "stolen goods parallel industry" level) seems to drive increased legitimate sales through greater exposure:

Earlier this year, YouTube users posted a skit called "Lazy Sunday: Chronicles of Narnia" from Saturday Night Live, and the clip became an overnight sensation. In February, NBC asked YouTube to pull the video down, and YouTube complied. However, after the clip showed up on YouTube, Saturday Night Live's ratings ballooned, says Gerry Kaufhold, an analyst with consultancy In-Stat. In the end, NBC decided to make even more programming available to the site.

I didn't realize YouTube only has $11.5 million venture capital, seems almost like chump change considering their pervasiveness.

Also, they don't seem to be making any money yet, still ramping up ad revenue. Will someone buy them, with lawsuits in the wings? They vow to stay independent.

Guess now I'm rooting for them. Interesting story, thanks for bringing it to the table.

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