Warner Music and YouTube Close to Licensing Deal

YouTube is by far the largest online video site in the world and one of the most popular destinations online. Still, even with Google's might behind it, it hasn't managed to become profitable just yet. Google says it's on the right track and revenue is increasing steadily and a new reported deal with Warner Music may be a sign pointing in that direction.

The new agreement, which according to AdAge has been already signed by the two parties involved, should bring music videos from artists like Green Day, U2 and Madonna back to the video site after being removed last year. Warner Music and YouTube have had a previous licensing deal but the major music label backed out last December after an agreement on revenue sharing couldn't be reached. Now though, the two companies have made up and have signed a new deal or are at least in the final talks, according to other sources.

Talks were resumed in summer and the negotiations are now apparently done with the official announcement being held back as YouTube encodes the video catalogue Warner has provided, a process that takes a while even with Google's processing muscle behind it. While the deal is good news for the fans of the artists represented by Warner, the agreement is actually more important as it paves the way for a much bigger deal with the upcoming Vevo.

Vevo is an online music video site joint venture between Universal Music Group and Sony Music set to be launched in the near future. The interesting part is that the site will be powered by YouTube, which is why Warner decided to hold back on talks for Vevo until it has secured a deal with Google. Warner Music is apparently looking to sign a non-exclusive licensing deal with Vevo and not opt for share of the new company like Universal and Sony. This way, the music label hopes to be able to find other avenues of distribution without being locked in with the upcoming video site.