The boss of the Universal Music Group has implied that his company may soon be taking action regarding the ever growing amount of its content that is appearing on social networking websites like YouTube and MySpace.
The record companies have been generally quiet regarding such sites, despite the fact individual music fans are using them to make available large amounts of copyrighted audio and video content without permission. Such sites do, of course, offer some promotional value for the labels, and in deed most labels have used the likes of YouTube and MySpace in their marketing activities in the last year. However Universal CEO Doug Morris has indicated that such promotional benefits do not compensate for what he sees as widespread copyright violation.
According to Reuters, Morris told an investors meeting this week: "The poster child for [user-generated media] sites are MySpace and YouTube. We believe these new businesses are copyright infringers and owe us tens of millions of dollars. How we deal with these companies will be revealed shortly".
Reuters also quote a Merrill Lynch analyst, Jessica Reif Cohen, who observed yesterday: "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 websites or to ensure the company is compensated for the use of its content. 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."
Of course, YouTube in particular are known to be in negotiations with the major record companies regarding their ambitions to host the ultimate online music video jukebox, but it is as yet unclear what exactly the video sharing website is proposing to the labels in that regard. YouTube avoided legal action from US TV network NBC over the uploading of its content on the site by reaching a deal which sees promotional content for the network's new shows getting legitimately posted.
However, Morris in particular is known to be wary of forgoing royalties on pop promo videos because of potential promotional benefits. In his speech on the issue this week he referenced how the record industry lost out when it offered its videos for next to nothing in the early days of MTV because of the perceived promotional benefit to the labels: "[MTV] built a multibillion-dollar company on our [music] ... for virtually nothing. We learnt a hard lesson."