Music companies line up for their share of YouTube
It has been a classic case of the dog that did not bark. Earlier this week two small video sharing companies, Grouper and Bolt.com were sued for breach of copyright. Yet the much larger – and arguably much more culpable – YouTube has escaped.
In turns out that it has taken more than sweet talk from YouTube’s new owners, Google, to prevent the lawsuits from landing on desks.
Just before the $1.65 billion sale YouTube and Google signed a series of deals with the music publishers that allowed them to legally host copyright videos. At the time it was seen as a breakthrough deal that meant that the music companies recognised the power of video sharing as way of spreading the word about an artist.
According to the New York Times, the timing of the deals was not entirely coincidental. The NYT says that each of the major music companies including Universal, Warner Music Group and Sony BMG received a small share in YouTube which could be worth up to $50 million.
It also explains why News Corp was unhappy that it was not given, in its own words, an ‘opportunity to participate in the sale process’.