This week, WMG and YouTube struck a deal that will give WMG a large chunk of the revenue created around their videos – which was the issue when they broke the deal in December 2008. The partnership covers the full Warner catalogue and includes user-generated content containing WMG acts.

This is great news for anyone wanting to publish video on YouTube and use music by artists under contract with WMG: over are the times of heavy WMG policing and removing of audio tracks that were deemed “infringing”. This is also very relevant to ad producers since WMG music is now implicitly licensed for publication on YouTube.

The deal gives WMG special rights: it will sell advertising around its videos on YouTube itself rather than leaving it to YouTube. YouTube will get a share. To that end, WMG will be given a special high-quality video player by YouTube with advertising capabilities that are not available on the standard player. WMG can thus clutter the video with a lot more advertising. I wonder what that will mean for embedding the music videos on other sites?

Also, YouTube’s Content ID technology will allow them to claim and monetise the audio tracks of UCG content. I wonder what effect that will have on the videos – will there be an overlay with a link through to iTunes or Amazon for purchasing the records? That might be the least intrusive. Or will there be large banners of WMG advertisers around them? Not sure how that is going to pan out, but we will certainly experience it.

It is said that it will take until the end of the year for all WMG music videos to return to YouTube, which includes the time it takes YouTube to implement the premium video player and the time to upload the videos in the high quality format.

However, UCG doesn’t have to wait any longer – go and enjoy the new-found freedom to use WMG music again on YouTube!

Interestingly, Universal Music Group seems to get a substational income from YouTube through their own channel and their artists’ channels. The UniversalMusicGroup channel is one of the most viewed channels on YouTube with currently 21M views (even if it doesn’t appear on YouTube’s top viewed channels list).It has playlists of the latest and top music videos and has the most subscribers of all of YouTube’s channels.

The breakdown of the agreement between WMG and YouTube had some serious effects in taking down the WMG channel and a whole lot of artist channels. Fortunately, not all artist channels were taken down. WMG also decided to go after all the user uploaded content that is using WMG music. This includes copies of music videos, but also user generated content that had their music in the audio track. YouTube had to take down the copies. To UGC, they offered the use of their AudioSwap tool which replaces the audio track of videos with pre-cleared content. Ultimately, where there was infringement in the audio track, YouTube removed the sound track altogether, resulting in many silent videos before altogether removing them (non-US link).

Who would have thought that his can have an effect on advertising?

Today, I checked out the top 10 video ads list that I created at the end of last year. The second one was the Cadbury “Gorilla” video that has a monkey playing drum to Phil Collin’s “In the air tonight”. Unbelievably, it has been taken down! Searches on YouTube for the original Cadbury ad have come up with copies that have only very view views, e.g. this one with 44,100 view. We expect these will be taken down as well before reaching millions of views, as YouTube’s copyright infringement algorithms start detecting them. Interestingly, instead of the ad with the original soundtrack, there are now videos with many different sound tracks, e.g. this copy which still achieves more than 2M views.

The most interesting story is however behind this copy, which uses Bonnie Tyler’s “Total Eclipse of the Heart” instead of the Phil Collins song and has managed to almost perfectly synchronise the drum beats. While originally being created by a YouTube user as a mash-up, Cadbury picked it up on the anniversary of the ad launch and ran the ad again with the new soundtrack. While, this happened before WMG took down the original ad, it is interesting to see that this new ad has picked up on the popularity of the original one and already has more than 1M views.

Unfortunately, this whole affair will lead to the Cadbury ad dropping off my top 10 ads of all time list, since it will be impossible to measure its views properly. I do hope that WMG and YouTube can figure out an agreement after all, so we can get all this interesting market analysis data back!