[Infowarrior] - Universal Music pressuring YouTube, MySpace

[Richard Forno]

Universal Music pressuring YouTube, MySpace
http://news.yahoo.com/s/nm/20060914/wr_nm/media_universalmusic_youtube_dc_1
By Yinka Adegoke Wed Sep 13, 9:22 PM ET

NEW YORK (Reuters) - Universal Music Group, the world's biggest record
company, is stepping up pressure against popular online sites YouTube and
MySpace, accusing them of infringing the copyrights of its artists' music
videos.

Universal chief executive Doug Morris described video site YouTube and News
Corp.'s social networking site MySpace as "copyright infringers" during a
Merrill Lynch investors' conference speech on Tuesday that was closed to the
press.

"The poster child for (user-generated media) sites are MySpace and YouTube,"
said Morris, according to a transcript obtained by Reuters. "We believe
these new businesses are copyright infringers and owe us tens of millions of
dollars."

He added, "How we deal with these companies will be revealed shortly."

"His remarks strongly suggested the company was planning to take legal
action in the near-term to either prevent the illegal use of their content
on these Web sites or to ensure the company is compensated for the use of
its content," Jessica Reif Cohen, analyst at Merrill Lynch, wrote in a note
on Wednesday.

"This could be the first salvo from a content player against business models
based on user-generated content, much of which relies on copyrighted
material."

Universal, owned by French media group Vivendi, has been in negotiations
with both YouTube and MySpace to offer its artists' music legally for a fee.

A spokeswoman for YouTube, a two-year-old start-up company that already
boasts more than 100 million viewings of short videos uploaded by users,
said, "It is our policy not to comment on our business negotiations."

MySpace declined to comment.

The runaway success of the free-to-view online video sites has raised the
question of whether rights holders such as record companies and movie
companies should be compensated, even if the clips are uploaded by the
users.

To date, YouTube has said it will take down any copyrighted material
illegally posted on the site once it has been alerted by the rights holder.

In February, YouTube was ordered by lawyers for General Electric Co.-owned
television network NBC to remove illegally posted clips of some of its
television shows, though in June the companies agreed to feature some of
NBC's shows legally on the site.

Last month, YouTube told Reuters that it is in discussions with record
companies to offer its users the ability to watch virtually every music
video ever made, but had yet to settle on a business model to allow viewers
to see the videos for free.

YouTube also announced later that month it would be testing a new
advertising model with Warner Music Group featuring celebrity hotel heiress
Paris Hilton.

Record companies are keen to avoid repeating the mistake they believe they
made when Viacom Inc.'s MTV was set up 25 years ago -- allowing their
artists' music to be aired for free.

Morris in his remarks to investors on Tuesday said MTV "built a
multibillion-dollar company on our (music) ... for virtually nothing. We
learned a hard lesson."