Universal targets YouTube

By Steve Malone

Posted on 18 Sep 2006 at 10:08

Universal Music appears to be sharpening its lawyers for a possible legal battle with the social networking sites YouTube and MySpace. Universal, which is also the world's largest music publisher, is reportedly concerned about its promotional music videos appearing on the sites.

'We believe these new businesses are copyright infringers and owe us tens of millions of dollars,' Universal Music CEO Doug Morris is reported to have told investors Wednesday. 'How we deal with these companies will be revealed shortly.'

Or perhaps it's just a bargaining position in advance of some negotiations over copyrighted material on YouTube. Last month, YouTube announced its intention to host every music video ever made. YouTube is currently in talks with the Universal and the other big music content holders to develop a pay-per-download service.

In the same conference, Morris noted that MTV built a 'multibillion-dollar company on our (music)' and clearly wants a sizable piece of the pie now that the model has moved online. One might also argue that MTV has shifted an awful lot of CDs for Universal over the years by plugging the promotional music videos.

YouTube currently accounts for around 60 per cent of the online videos watched in the US. To a company like Universal, this is getting uncomfortably close to the kind of dominant position currently occupied by iTunes in the music downloads market. Recently, Steve Jobs has used that dominant position to turn down demands from the music publishers that iTunes move away from its flat price model towards a multi price structure where popular tunes would cost more, calling the music companies 'greedy'. Universal would not like to be in the same position with YouTube.

However, Universal would still need to prove intentional copyright infringement in court. YouTube has so far managed to avoid being sued for copyright infringement by complying with the 'online service provider safe harbours' clause contained in the US Digital Millennium Copyright Act. This gives telcos and carriers some protection against hosting copyright material providing they act to remove the offending content as soon as they are notified of its existence.