Music Labels Cast Worrying Eye on Video Sharing Sites; Rev Share Deals Possible

The worry from music labels is on two fronts: one is that music videos are being uploaded on sites like YouTube, Google Video, MySpace Video and others, as this Billboard story highlighted earlier month. Then a rather alarmist story in WSJ today about the background music being used in lip-syncing/mashup videos users upload to these sites.
In the first case, RIAA recently issued cease-and-desist letters to YouTube users sharing videos from the likes of Nelly Furtado, Beyonce and Rihanna, which it readily adhered to. Music videos are growing as a revenue stream for the labels: The RIAA estimates that sales of music videos topped $3.7 million in three months, after being introduced in October. Meanwhile, the major labels also are sharing in the profits of ad-supported video-on-demand offerings from AOL, Yahoo, Music Choice and others.
In the second case, it is about amateurs lip syncing to music by the Backstreet Boys, Nsync and other pop artists. For now, lawsuits have not yet been raised as a serious prospect by the music industry, as these most of these sharing sites themselves are not making any money, or showing ads in these videos.
Also, both Warner Music Group and Universal Music are exploring a variety of possibilities with YouTube and others, including sharing any revenue from ads displayed when their songs are playing. YouTube and other video sites have recently entered negotiations with BMI and ASCAP, which collect royalties on behalf of songwriters when their music is played in public or broadcast.
Another video sharing service Grouper is in discussions with music companies about promotional relationships that will allow its users to legally use tunes as soundtracks in their videos.