Warner Music grudgingly extends deal with YouTube

Amidst the hostility shown by the music industry to YouTube for its low royalty rates, Warner Music Group (WMG) has extended its recording and publishing deal with the video platform.

In a note to his troops, WMG CEO Stephen Cooper made it quite clear that the deal (terms unspecified) was signed with the background of frustration. 

His memo used phrases like "months of tough negotiations" and "the best possible deals under very difficult circumstances" and revealed that the period of the extension was shorter to allow for "more options in the future". 

Warner apparently managed to get a slightly better royalty rate for use of its content on the YouTube Red subscription service. 

Neither Universal Music nor Sony Music have extended their deals. 

But as Cooper made clear, "There’s no getting around the fact that, even if YouTube doesn’t have licenses, our music will still be available but not monetized at all.

"Under those circumstances, there can be no free-market ‘willing buyer, willing seller’ negotiation." 

As TMN has reported, the IFPI’s Global Music Business Report 2017 noted the disparity in payment to rights holders between user-uploaded video services protected under safe harbour ($553 million from an audience of 900 million) and streaming services ($3.9 billion from 200 million users). 

The music community is lobbying to remove “safe harbour” protection from platforms as YouTube when users upload copyright infringing content.

YouTube, responding to the Warner deal, said it was “pleased” with the outcome.

“This new deal continues to capitalize on the growth in advertising revenue we’ve paid to the music industry – over a $1 billion paid out between November 2015 and December 2016 – and is an important step to enabling the international expansion of our subscription service, YouTube Red.”

Irving Azoff, who manages The Eagles and Christina Aguilera, emailed his concerns to Billboard.

It read in part: "I trust that Warner took its responsibility to its artists and insisted on two crucial points: both better control for artists and increased compensation.

“If there was no progress made on either control nor compensation, then it is a step backwards."