Universal Music executive Doug Morris told an investor meeting that “YouTube and MySpace owe us tens of millions of dollars.” The two popular sites allegedly violated copyright laws by allowing users to post video and audio material from Universal artists online. The record company has been negotiating with both sites for some time about how to handle the rights matter, but the conversation with YouTube in particular is extremely difficult. If the parties do not reach an agreement before the end of this month, Universal would go to court, according to an insider. “It will soon become clear how we will deal with these companies,” threatened Morris, who apparently does not have much faith in the good outcome.
Experts confirm that Universal is getting quite frustrated, and that Morris is therefore putting its heels in the publicity sand. “The sites now know they can expect legal action if they don’t cooperate,” said analyst Rob Enderle. However, a lawsuit would mean a break in trend: various record companies like to use the popularity of MySpace and YouTube to draw attention to their artists, often offering free content. The administrators of the YouTube video site have already stated that they always respond to requests to remove copyrighted material, but Warner and Capitol, among others, have placed material themselves to promote their artists. However, Universal sees clips as a source of income, and last year the company already billed Yahoo and AOL. It therefore seems very likely that the two websites can make their chest wet.