Warner’s move will affect its recordings as well as the songs it owns through Warner/Chappell Music. The impasse comes at a time when all four major labels, including Universal Music Group, Sony Music, and EMI, are renegotiating their licensing deals with YouTube.

 

Theoretically speaking, the new development means that YouTube users cannot view music videos by Warner artists, including Led Zeppelin, Aretha Franklin and Linkin Park. It also means that any video, even one that is homemade, that features music by a Warner artist, or written by a songwriter published by Warner/Chappell Music Publishing, won't be available, either.

 

Edgar Bronfman, Warner’s chief executive, made its recordings and its catalogue of songs available to YouTube in September 2006, a month before the upstart video sharing site’s $1.65bn acquisition by Google and at a time when Universal Music was actually suing the group.

 

This time the talks fell apart early on Saturday because Warner wants a bigger share of the huge revenue potential of YouTube's massive visitor traffic. "We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide," Warner said in a statement.

 

However YouTube has become an important revenue stream. This week, Rio Caraeff, Universal Music's digital chief, told CNET News that YouTube has generated "tens of millions" of dollars for the recording company this year, up 80 percent from last year.

 

By pulling out of the deal with YouTube, Warner loses access to the Web's No. 1 video site, which topped 100 million visitors in October. The site has increasingly become one of the Internet's favorite ad-supported jukeboxes. Of the top 10 YouTube channels, 7 are music related. Warner Bros. Records is the 11th largest channel.

 

YouTube also has agreements with the other major labels, which it is now renegotiating. It is not known whether Warner’s move could effect the other negotiations. It isn't clear whether the decision to remove the content was made by Warner Music or YouTube. But regardless, the dispute may indicate the start of a broader dispute between YouTube and the music industry over the value of music content on the site.

 

While Caraeff declined to give specific details on Universal's YouTube revenue, a source close to the label told News.com that the label will likely book nearly $100 million in revenue from video streaming this year, which includes placements on other sites like MySpace and MTV.

 

Warner has advised YouTube users that they could find alternative ways of incorporating music in their videos, steering them to Audioswap, a library of music for which rights have been pre-cleared.