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YouTube and Warner Music Finally Overcome Their Differences

YouTube and Warner Music Group have been stuck in a stand-off since December, when Warner pulled all of its artists' clips - both professional music videos and user-generated content using its songs - from the site.

Warner Music Group's complaint: it wasn't adequately compensated for its content. The two companies have finally reached an agreement to license Warner Music Group's music and video library, through a revenue sharing deal, a deal I broke on CNBC earlier today.

The deal is a multi-year, global deal that covers the music label's full catalog, including both official music videos as well as user-generated content that includes Warner Music songs.

It's a pure revenue-sharing deal - unlike some deals where companies have to pay an upfront licensing deal - and Warner Music Group gets to sell its own ad revenue.

Now that YouTube has nailed down a deal with Warner Music Group, the video sharing site has the right to run - and profit from - music from all four major music labels and publishers. No longer will YouTube have to pull clips of kids dancing to a Madonna song from its site; nearly all music use on the site is legit. This is yet another sign that YouTube is shifting from being a rogue threat, to being a legit revenue-generating distribution mechanism. The music industry needs all the help it can get, so why not find a deal with YouTube that works? And now YouTube is working to restore videos it had to pull down nearly a year ago.

YouTube tells me it's working on a premium video channel for the site, where it would aggregate all professionally created music videos. Sounds like the original MTV for the web. How ironic that of all the media giants, Viacom has battled with YouTube the most.

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