YouTube is very important to the music industry, and the music industry is very important to YouTube. It’s a symbiotic relationship that needs everyone singing from the same hymn sheet in order to work. Sony Music has taken the lead by becoming the first major record label to agree to a new deal.
YouTube = Music Videos
There are probably two things you think of when asked about content on YouTube: funny clips of pets; music videos. The first, by way of user-generated content is being increasingly squeezed by professional content, either by big media companies or keen amateurs. But music videos are still a core part of YouTube.
Old Deal Vs. New Deal
Unfortunately for both sides, the current deals that YouTube has in place with the major record labels are coming to an end. And bizarrely, neither side seems happy with what they were getting from the old deal, and have reportedly tried to renegotiate in their own favor.
The old deal supposedly saw YouTube guaranteeing to pay the record label either a per-streaming fee or a percentage share of the advertising revenue on any given clip. The music labels have wanted this figure to go up, while YouTube has obviously argued it needs to go down.
Warners Jumped First
This situation where neither side seems willing to back down or compromise lead, rather dramatically, to Warner Music jumping ship, and taking its wares with it. In late December, every Warner Music video suddenly disappeared, literally overnight, from the Google-owned site, signaling an end to negotiations.
Just a couple of days later, there were rumblings that the big four record labels would attempt to bypass YouTube altogether and set up a kind of ‘Hulu for Music’. Nothing seems to have come of that idea, and Sony now signing a new deal would indicate it never will, purely because there’s no need for it.
Sony In The Bag
The Sony/YouTube deal isn’t yet official, but All Things Digital claims an agreement is in the bag. This follows on from CNet claiming that Sony was very near to a deal just over a week ago. Obviously with no official announcement having been made, details of the alleged deal remain unknown.
Conclusions
Is it purely a coincidence that news of this deal comes right off the back of YouTube officially implementing the idea of paid downloads? While record labels are unlikely to sanction downloads of music videos due to the (present) lack of DRM, the move does signal Google’s willingness to embrace new methods of monetization.
I’m glad the deal has been done, and hope Universal, EMI, and Warners now follow suit. The latter would seem to be the hardest nut to crack because the Warner Music Group has already signaled its intentions to give no ground. However, money talks, and there’s clearly money to be made for both sides in having music videos on YouTube.
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