The music world is certainly changing at a rapid pace. Youtube has managed to hang on for the ride though. Back in May, the company announced an extension of their 2006 contracts for both music publishing and music recording, with Warner Music Group. According to an internal company document that Variety obtained, CEO Steve Cooper revealed to his staff that the negotiations were “tough” but they managed to create the best possible terms. The terms favored songwriters’ rights and were made for a shorter time period than usual to allow flexibility. Cooper revealed hesitations with the deal for three main reasons: Youtube can’t monitor every video that is uploaded causing many artists to inevitability get ripped off, the site is protected by ‘safe harbor’ laws and royalty payments are much lower than other sites/sources. The two companies have had a quarrelsome relationship, but for now they will continue to partner.
Since Warner became the first music company to sign a licensing contract with Youtube, several other companies have toyed with the idea of following suit. Universal Music Group has been next to hop on the youtube train. The company announced a deal just this morning. After some negotiation, the two companies came to favorable terms for a “global, multi-year agreement.” Susan Wojcicki, CEO of Youtube, shared that they are “thrilled” about the deal. She went on to share, “This agreement means we can drive more value to the industry, break and support more artists and deliver an incredible music experience to fans around the world.”
Universal Music Group’s chairman, Lucian Grainge, shared her enthusiasm: “I look forward to collaborating with Susan and her team at YouTube on the important work ahead to advance artists’ interests and sustain the music industry’s recent growth.” He concurred that the deal would improve content flexibility and compensation policies. According to Variety, Universal’s deal is different from Warner’s. Universal’s comments reflected a greater faith in Youtube’s growing ability to police piracy and push for paid services.
Other sources have also told Variety that Youtube has also reached a deal with Sony. Sony has declined to comment, but both Variety and Bloomberg have leaked speculations about the deal. If this is true, Youtube will have connections at all three major labels, elevating their power in the music streaming world. Youtube announced recently that they plan to release streaming service in March of 2018. It is very possible that the new deals with UMG and WMG will play a role in this new service.
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