Music Chief Rails at Websites
Head of Universal says social spots such as YouTube and MySpace help violate copyrights.
By Charles Duhigg
Times Staff Writer
September 14, 2006
To some in the music industry, social networking websites such as MySpace.com and YouTube.com are a godsend, helping listeners enjoy their favorite acts and discover new bands.
But not to the head of the world's largest music company.
On Wednesday, Universal Music Group Chief Executive Doug Morris took a swipe at social networking, contending that the sites assist users in violating copyrights of music videos.
"We believe these new businesses are copyright infringers and owe us tens of millions of dollars," Morris said. "How we deal with these companies will be revealed shortly."
Representatives of YouTube declined to comment on Morris' remarks, made during a Merrill Lynch Media & Entertainment Conference in Pasadena.
Some observers thought Morris' comments were more posturing than threat, stemming from talks about how music companies will be compensated.
"This is probably a negotiating ploy," said entertainment analyst Mike McGuire of research firm Gartner Inc. "Nobody really wants MySpace or YouTube to disappear. The music industry needs them too badly. They're just figuring out how to get paid."
But a company source says Universal Music executives have discussed suing YouTube, alleging copyright infringement, if continuing negotiations with the company are unsuccessful.
YouTube and News Corp.-owned MySpace have become enormously popular by letting users post almost anything online.
Some of the most popular postings are copyrighted music videos that include Universal Music artists, such as Mariah Carey and the Black Eyed Peas. Other sites, such as those of Yahoo Inc. and Time Warner Inc.'s AOL, also offer videos, but they pay Universal Music each time a video is viewed.
Insiders at Vivendi's Universal Music said the four major music companies — Universal Music, Sony BMG Music Entertainment, Warner Music Group and EMI Group — were in negotiations with YouTube to adopt screening software that would keep unauthorized videos off the sites.
Currently, companies can notify YouTube when a copyrighted video is detected and ask for its removal.
But there is no way to prevent postings. On Wednesday, a search for "Black Eyed Peas video" on YouTube returned 553 results.
MySpace.com is also in negotiations with the four major music companies to sell songs and videos over the site.
The industry is trying to avoid a misstep committed at the founding of MTV, when music labels helped build the television channel by providing videos free of charge to promote their artists. Labels saw none of the hundreds of millions of dollars MTV later earned.
