Report: Warner Music Unplugs From YouTube

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via The Street

Warner Music Group(WMG QuoteCramer on WMGStock Picks) Saturday ordered YouTube to remove all music videos by Warner artists, according to a published media report.

Warner Music’s demand comes after it was unable to work out a new licensing agreement with YouTube, according to the report, published Saturday by Reuters. YouTube is owned by Google(GOOG QuoteCramer on GOOGStock Picks).

Negotiations between the companies fell apart because Warner Music wants a bigger portion of the potential revenue from YouTube’s online visitor traffic, according to the report.

“We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide,” Warner Music was quoted saying in a statement.

In 2006 Warner Music, Universal Music and Sony Music took stakes in YouTube, the report noted. Soon after, Google bought YouTube, and the companies profited from the acquisition.

When their videos are played on YouTube, the music companies typically receive a share of the ad revenue associated with the videos, along with a per-play payment for each video viewed, the report noted.

But music industry sources reportedly have said the amount of money the videos generate has been small.

If other media companies follow Warner Music’s lead, YouTube could find itself losing more music-related content. YouTube currently has agreements with Universal Music Group, Sony’s(SNE QuoteCramer on SNEStock Picks) Sony Music Entertainment and EMI Music, the report noted.

Shares of Warner Music Group closed Friday down 2 cents at $3.06. Shares of Google finished the session down 11 cents at $310.17

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