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after contract negotiations broke down between the two companies. So what was the sticking point in the talks. Money of course, which Warner wanted more of. this could possibly effect hundreds of thousands of music video clips which Warner has the rights to.
Warner Music, home to artists including Red Hot Chili Peppers and rapper T.I., was the first major media company to negotiate a deal with YouTube in 2006. Its executives believe that deal gave the site legitimacy in the eyes of search giant Google Inc (GOOG.O) which bought it soon after for $1.65 billion.
The music companies typically get paid a share of any advertising revenue associated with the video and a per-play payment for every video viewed. The per-play fee is usually a fraction of a penny and with millions visiting YouTube everyday it was all expected to add up to a substantial amount.
But a source familiar with Warner Music's talks said the amounts it has been receiving from YouTube were "staggeringly low".
Maybe it was YouTube short-changing Warner? With YouTube being owned by Google, it really wouldn't surprise me if Google is short-changing the company in the same way that they do website's and bloggers with their Adsense ads. I've had experience with Google's Adsense and they seem to have a problem in paying their Adsense posters when payment time comes around. Not, all mind you, but many.
Anyway, back to the music companies.
YouTube also has agreements with Vivendi's (VIV.PA) Universal Music Group, Sony Music Entertainment and EMI Music. Warner's move could see them also making tough demands for higher fees.
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