Legal YouTube Copyrighted Content Sharing

Music Companies Grab Share of YouTube Sale

by Yaroslav Lyssenko

[ 10/29/2006 | 07:44 AM ]

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YouTube’s young founders may have been the biggest beneficiaries of the recent’s $1.65 billion deal with Google, but they have some unexpected “co-partners” – old-line media companies that had been considered YouTube’s biggest legal threat.

According to a news-story by The New York Times, three of the four major music companies - Vivendi’s Universal Music Group, Sony and Bertelsmann’s jointly owned Sony BMG Music Entertainment, and the Warner Music Group – each quietly negotiated to take small stakes in YouTube as part of video- and music-licensing deals they struck shortly before the sale. The music companies collectively stand to receive as much as $50 million from these arrangements.

“Because a significant portion of the videos posted to YouTube contain copyrighted songs or video material, the Web site had been considered a litigation land mine. Last month, Doug Morris, the chief executive of the Universal Music, called YouTube and MySpace “copyright infringers” and said the sites “owe us tens of millions of dollars,” says the article.

The companies’ deals with YouTube call for them to share revenue from ads that will run alongside their music videos. As part of the deal, YouTube will use new technology to identify copyrighted material that users have uploaded to the site without permission.

“It was Bronfman, now chief executive of Warner Music, who struck the first deal with YouTube. Universal and Sony BMG followed suit. Details of the stakes that the music companies received as part of those revenue-sharing and content-licensing deals could not be learned at the time. Of the four major record companies, only EMI did not strike a deal with YouTube,” explains

YouTube’s deals with Universal and Sony BMG came hours before it announced its deal with Google.

• The New York Times: Music Companies Grab Share of YouTube Sale.