YOUTUBE PACTS WITH
UMG, SONY BMG

There will be no lawsuits and no yanking of videos, as the two join previously announced Warner Music Group in making agreements with the popular video sharing site in exchange for what many are saying are equity positions in the privately held company. There had been reports last week that Google had its eyes on acquiring YouTube to turn its impressive marketshare in video searches into advertising dollars, a percentage of which will now find its way into label coffers.

YouTube's agreements with UMG and Sony BMG will make their content available, including the use of music from its catalog in user-generated clips, in exchange for "compensation to the companies and their artists." Additionally, YouTube has agreed to a use its technology to filter out unauthorized content. Terms of the deal were not revealed. EMI remains the lone holdout for the time being.

Said UMG chief Doug Morris, after taking his lawyers off speed-dial: "Universal is committed to finding innovative ways to distribute our artists' works, and today’s agreement with YouTube furthers that strategy by helping transform this new user-generated content culture into a mutually beneficial business opportunity. We pride ourselves in empowering new business models that create new revenue streams for content creators. YouTube is providing a new and exciting opportunity for music lovers around the world to interact with our content, while at the same time recognizing the intrinsic value of the content that is so important to the user experience. Now to search their data base and see how many times 'Sweet Talkin' Guy' shows up."

Sony BMG's Global Digital Business head Thomas Hesse was similarly enthused: "With its trademark blend of music, videos and fan-generated content, the YouTube environment represents a fascinating new way to deepen the relationship between our artists and their fans. We are pleased to be working with YouTube on this new initiative that respects the rights of artists and copyright holders, while at the same time making our content commercially available to a broader audience than even before. And I can't wait to see the clip where Rolf undresses to 'Promiscuous.'"

Added YouTube co-founder and CEO Chad Hurley: "With these strategic alliances, UMG and Sony BMG bring an incredible array of entertaining video content to the YouTube community to help their artists communicate directly with fans. By allowing the use of their content in user-generated videos, they are embracing the creative spirit of our users and music lovers around the world while protecting the rights of their artists. As a new distribution channel for media companies, YouTube is committed to balancing the needs of the fan community with those of copyright holders to continue to provide the best video entertainment service on the Internet—one that promotes individuality, respect and originality. Now, can I say, 'ka-ching?'"