The world's biggest record label has said that it may pursue YouTube and MySpace for copyright infringement. The move reverses big business's recent courting of the new media titans.
"We believe these new businesses are copyright infringers and owe us tens of millions of dollars," Universal chief executive Doug Morris told investors at a conference this week. "How we deal with these companies will be revealed shortly."
YouTube and MySpace have grown exponentially in recent months as viewers flock to watch and hear clips posted by users. Many of the clips are of copyrighted material and are posted without holders' permission.
Rights holders such as record labels and broadcasters initially opposed the use of copyrighted material but as the power of the two sites has grown, so has the willingness of mainstream media organisations to cooperate.
CBS chief executive Leslie Moonves told the Royal Television Society conference this week that he is considering putting together a special news clips package each day for distribution on YouTube.
Already, broadcaster NBC has agreed to have its own channel on YouTube filled with its content. Doritos has set aside a $2.5 million Superbowl ad slot during which it will show a user-created advert posted on YouTube competitor Yahoo! Video.
Universal's surprise announcement that it is about to take action reverses that recent trend of cooperation between old and new media. Record labels and broadcasters may fear that they are being left behind in a rich-media online revolution. Many are reported to have considered buying YouTube, but a likely $1 billion price tag that analysts put on the business will deter most, including Moonves.
"I doubt we would buy it at this point," Moonves told the RTS. "Maybe we would look for the next YouTube, the next great idea that's not spread across the world."
Some analysts believe that Universal's newly aggressive stance is a bargaining tactic in ongoing negotiations with user-content sites over how to integrate legal, licensed content. "To drive the negotiations in the directions they want, they're starting to make it clear there are legal alternatives for not complying with what Universal wants done," analyst Rob Enderle told news wire AP.
While YouTube consists of user-submitted video snippets, MySpace is often host to unlicensed clips of music posted and hosted by fans of bands. Many record labels are now using MySpace as a mainstream promotional tool for acts.
