The global licensing deal between YouTube and Sony Music Entertainment has been renewed, and the popular video sharing Web site will continue to show the company’s music videos. Sony considers that its productions’ presence on the Web site is still extremely valuable, helping its artists get the needed exposure.
This is considered a very important decision, especially for YouTube, which lost two months ago its partnership with Warner Music Group. Warner’s officials decided last December not to renew its contract and asked YouTube to take all of its music videos down.
According to the reports released by comScore, a Web audience measurement service, YouTube was visited in December by more than 100 million users, with its popularity growing with each passing day.
YouTube’s contracts with the world's largest music company, Vivendi's Universal Music Group, and privately held EMI Music are still up and running, as until now, both companies appeared to be satisfied with the terms and results. Still, for the near future, both companies have allegedly scheduled renewal talks.
The reason why these negotiations are needed by the music companies is that at the time the deals were signed, they were truly satisfactory on both ends, but over the past few years, the music videos have become one of the biggest digital revenue streams for companies like YouTube and MySpace. There are many videos which record millions of views, and it is only fair that the company owning the rights to that material to receive a payment. At this point, the average pay for each video view is around half a cent. What made Warner drop its contract was the fact that its demands slammed into YouTube’s financial requests, as it is well known that its owner Google, has been complaining about the revenue received, which is far from what the company expected.
The failed negotiations from December must have given YouTube’s officials the information needed to properly address its discussions with Sony, and a similar strategy will surely be used with Universal and EMI.
There was another announcement made by YouTube this week, as the company decided to try out free and paid video downloads. This is another attempt to try and bring in revenue using its massive public appeal. The plan is to allow this feature for some of its partners’ videos, which will be downloaded for free or for a certain amount of money through Google Checkout. Users will soon notice a new My Purchases tab right under the My Videos menu, which will help them keep a record of the downloaded videos.
Users will be able to download free video from Stanford, Duke, UC Berkeley, UCLA, and UCTV. The paid content is provided by the company’s partners Khan Academy, Household Hacker, and Pogobat which sell their videos for a $0.99 fee. All downloaded videos are in the MP4 format. It is still unclear whether this project will take off or not, as there are several Web sites that people can use to get the videos featured on YouTube on their hard drives.
