YouTube cuts deals with CBS, major music labels

Empty

Online video-sharing hub YouTube Inc., under pressure to avoid a copyright infringement fight with the entertainment industry, said Monday it struck deals to license music videos and other content from CBS Corp. and two major record companies.

The separate agreements with CBS, Vivendi's Universal Music Group and Sony BMG Music Entertainment came less than a month after YouTube reached a similar deal with Warner Music Group Corp. involving content posted by users on the hugely popular Web site.

Also Monday, Warner and Sony BMG announced separate licensing agreements with Google Inc., which said it intends to buy YouTube for $1.65 billion in stock.

Financial details of the deals were not disclosed.

The wave of dealmaking reflects how the growth of online video content -- particularly user-created works that sometimes include copyrighted material -- has emerged as a potentially lucrative market for the sagging recording industry.

"The enormous popularity of these video sites made it clear that a large number of people absolutely love these sites, and so connecting artists with their fans using this viral video platform is incredibly important to us," said Thomas Hesse, Sony BMG's president of global digital business.

Sony BMG's deal with San Mateo-based YouTube allows the Web site to display music videos and homemade videos that feature some of the label's songs. YouTube will share advertising revenue with Sony BMG for all amateur music videos that incorporate audio or video works from its library.

The record company, a joint venture between Sony Corp. and Bertelsmann AG, is home to artists such as Bruce Springsteen, Justin Timberlake and Jennifer Lopez.

YouTube's deal with Universal Music Group is similar. The Web site has permission to host music videos by Universal artists, which include U2, The Killers and Black Eyed Peas.

Universal and its artists will be compensated with ad revenue for user-generated content that incorporates Universal's music, the company said.

Last month, Universal Music Group CEO Doug Morris accused YouTube and social-networking hug MySpace of violating copyright laws and suggested the companies owed the record labels "tens of millions of dollars."

Under terms of the deals with the labels, YouTube is responsible for developing technology to identify copyrighted content in videos posted on its site. The technology will give the labels a means to spot when copyrighted work is offered on YouTube and to filter out copyrighted content they don't want posted on the site.

"YouTube is committed to balancing the needs of the fan community with those of copyright holders," said Chad Hurley, chief executive of YouTube.

CBS Corp. said it will provide short-form video content for a CBS "brand channel" on the YouTube site starting this month. It will include news, sports, Showtime and prime-time programming.

Among the offerings will be short clips from top programs such as "Survivor," as well as mini-previews for new fall shows.

YouTube and CBS will share revenue from advertising sponsorships of the CBS content.

"We're now able to offer select entertainment, news and sports programming to a new significant audience, get paid for it, and learn a few things along the way," said Leslie Moonves, president and chief executive of CBS.

The deals involving Google entitle the Web giant to stream music videos on Google Video while positioning Warner and Sony BMG to gain revenue from online advertising.

Google partner Web sites on its AdSense publisher network will also be able to display music videos by artists at both record labels.

The Warner-Google agreement also lets Google sell select music videos for downloading for $1.99 each, the companies said.

Google plans to eventually offer user-generated videos with Warner Music and Sony BMG content.

Like YouTube, Google must first roll out a technology that gives the record labels the option of removing their material from the site.

Shares of Google rose $9.44, or 2.26%, to $429.90 in afternoon trading on the New York Stock Exchange. Shares of CBS rose 7 cents to $28.54; while shares of Warner Music Group fell 16 cents to $26.67, also on the NYSE.
comments powered by Disqus