Warner Music Group's videos
began disappearing from YouTube this weekend, the casualty of a contract
impasse between the music company and the Internet's dominant video site.
Negotiations broke down last week over licensing fees for Warner's music and videos, say people familiar with the discussions who were not authorized to speak publicly.
On its blog, YouTube alerted its audience to the collapse in talks, noting that professionally produced music videos and those that fans create using Warner songs would begin to disappear.
It remains unclear whether YouTube
or Warner decided to pull the plug.
"Sometimes," wrote YouTube in its online message to users, "if we can't reach acceptable business terms, we must part ways with successful partners."
Warner Music -- home to such acts as Madonna, rapper T.I., Red Hot Chili Peppers and Linkin Park -- issued a brief statement Saturday, saying it was working to find a resolution with YouTube that would return its artists' content to the site.
"Until then, we simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide," Warner said in the statement.
The stalled discussions suggest that Warner is dissatisfied with the revenue stream it gets from YouTube.
Warner was the first of the major labels to strike a licensing deal with YouTube, in 2006. Its executives think its cooperation lent legitimacy to the video website, setting the stage for the $1.65-billion acquisition of YouTube Inc. by search giant Google Inc.
In the original discussions, Warner, Vivendi's Universal Music Group and Sony BMG Music Entertainment all received small stakes in YouTube as part of music-video licensing deals.
Under terms of YouTube's contracts, the labels stand to collect either a minimum fee of less than a penny each time a music video is watched or a split of advertising revenue, whichever sum is greater.