Warner and YouTube sign new deal… ‘under very difficult circumstances’

Warner Music Group has inked a new global licensing deal with YouTube – but not without some serious reservations.

MBW has got hold of a leaked internal memo sent earlier today by WMG boss Steve Cooper (pictured), in which he reveals that the company has extended its YouTube deals both for publishing and recorded music.

“We secured the best possible deals under very difficult circumstances,” says Cooper.

He explains that the new agreements are shorter than more typical YouTube terms – which tend to run to three years – suggesting WMG’s new deal will expire after a year or two.

Just because Warner has agreed to license YouTube doesn’t mean it’s happy about the platform’s practices, however – particularly the ‘safe harbor’ laws which protect the Google/Alphabet-owned company from legal responsibility whenever its users commit copyright infringement.

“[Our] fight to further improve compensation and control for our songwriters and artists continues to be hindered by the leverage that ‘safe harbor’ laws provide YouTube and other user-uploaded services,” adds Cooper.

“There’s no getting around the fact that, even if YouTube doesn’t have licenses, our music will still be available but not monetized at all. Under those circumstances, there can be no free-market ‘willing buyer, willing seller’ negotiation.”

According to the latest IFPI stats, user-upload video services such as YouTube paid through $553m to recorded music rights-holders in 2016, generated by a music-listening audience of over 900m users.

By contrast, on-demand audio streaming services contributed $3.9bn, despite having a much smaller audience of 212m users.

Warner has significant history with YouTube: the music company became the first major to license the video platform in September 2006, just one month before Google acquired the startup for $1.65bn.

In late 2008, Warner actually pulled its content from YouTube – ‘going dark’ on the service and leaving it legally unlicensed.

Yet just nine months later Warner publicly announced that its music would be returning to the platform.

Last year, thanks to a filing at the US Copyright Office, we discovered why this U-turn came about.

Warner revealed that in the year following its 2008 YouTube blackout, it spent $2m on “largely unsuccessful” attempts to block/remove its copyright content on the service.

What’s more, Warner further admitted that the YouTube deal it inked in 2009 was scarcely better than the offer it rejected the previous year for “failing to appropriately and fairly compensate recording artists”.

Warner is the only major music company that doesn’t own equity in streaming video platform Vevo.

It’s expected that Sony and Universal will negotiate their next YouTube premium video deal as part of Vevo, with UGC rights negotiated separately.

You can read Steve Cooper’s confidential internal memo in full through the below link.

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