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The Southern District Court of New York has ruled in favor of Youtube in an ongoing case between the video service and Viacom. The court determined Youtube is protected by the safe-harbor provision (section 512) of the US Digital Millennium Copyright Act. Viacom filed the suit in March of 2007, accusing Youtube of enabling users to unlawfully post their copyrighted content online.

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The partnership between Google and the major music companies signify a shift regarding the outlook on piracy and catalog availability. Record companies hope Vevo will enable them greater control and prove capable in attracting its own audience. Both Vevo and Youtube hope to increase ad revenue by gaining higher CPMs through the deal. Warner Music Groups unwillingness to join Vevo reflects the labels on going reluctance to embrace digital music. WMG continues to promote individual artists instead of its entire catalog. The label has paired with Hulu as a showcase for its select talent.

Universal Music Group remains the pioneer behind digital experimentation. Its leadership in Vevo and its early signing of distribution deals with the free-to-download services reinforcing the fact. UMG’s approach to digital experimentation seems justified compared to the conservative approach of WGM. In three of the past four quarters UMG’s digital revenue as a percentage of its total revenue has been much higher than that of WMG’s.

Acquisitions on the part of Apple and MySpace forecast future availability of streaming and cloud-based services. Apple’s acquisition of Lala indicates future plans to release a music service that makes full use of the iPhone. MySpace continues to gravitate toward a music portal strategy with the purchase of Imeem. MySpace was likely attracted to Imeem not only for its technology but also for its current audience (around 19 million unique monthly users).

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The new video site Vevo had a rocky launch on December 8 with multiple site crashes due to the unexpected quantity of new users. Despite the false start it seems to be an impressive looking site that helps users track down videos they want without having to sift through a lot of unrelated content. Vevo isn’t a YouTube competitor, although it saves users time from sorting through karaoke videos of the latest singles in order to find official music videos. YouTube hosts the video files for the site created through a partnership between UMG, Sony and the Abu Dhabi Media Company. The plus for businesses? Ad-supported videos, which are able to lure in music fans. Things aren’t looking too shabby for artists and brands either, as it is certain that connection with fans on the web is important in today’s market.

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Since the beginning of the digital age of music it has been argued that the Internet is harmful to the music industry due to piracy. Recently however John Taylor, bassist for Duran Duran has tried to shift the conversation to a different area—the Internet is hurting artist’s creativity. He argues that sites like YouTube and Twitter are largely to blame as they provide access to music that is decades old. He believes that the music of the past is extremely influential and constant exposure to it stifles modern artists creativity. However if you study modern-day music, it is clearly a patchwork of influences from previous genres. Innovation isn’t stifled by access to music, it inspires great new music. Each new genre or musical revolution was inspired by the music that came before it, it may be a response, a new interpretation, but it is always affected by some music that the artist had heard before. Music evolves because artists have access to new influences and audiences and the Internet merely helps make this possible.

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Warner Music Group and Google owned YouTube have reached an amicable agreement. YouTube now features “official artist channels” and is also looking at a new advertising plan. WMG’s recordings and music videos have been absent since they accused YouTube of not properly compensating them for their music. Now that they have reached an agreement Warner Music Group will have their recordings back on the site before the end of the year. They will also have a third-party agency handle advertising on the site giving the label more control as well as a larger portion of advertising revenue. Both parties seem extremely happy about their new agreement, WMG even pointing out that there will be “an enhanced user experience on YouTube with a feature-rich, high quality premium player and enhanced channels”.

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Regional Mexican music, although outselling all other styles of Latin music, has lagged in digital sales. However, with the ever-growing popularity of viral marketing such as YouTube and Twitter, it has become apparent that this genre transcends barriers of age and language. This is no news to Latin music executives, as half of Latin music sales in the country are in the regional Mexican music genre. New artists like Larry Hernandez are using YouTube as a major marketing tool and veterans to the genre like Vicente Fernandez are receiving placement on the iTunes home page, giving regional Mexican music greater visibility. Billboard’s Regional Mexican Music Summit Conference taking place Oct. 7-9 will be focused on a discussion about the genre’s embrace of new forms of marketing. It’s goal is to provide a forum where songwriting, publishing, new media, radio programming, emerging technologies, touring and other topics will be discussed. E-mail the author at lcobo@billboard.com with suggestions or ideas to contribute to the conversation.

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Universal Music Group and Google are teaming up to create an online service called Vevo. They are hoping this service will generate more revenue for UMG's music video content. Vevo is expected to launch by the end of 2009, and will provide to YouTube, Yahoo, AOL, and MTV.com.
"The idea behind Vevo is to create a scarcity of advertising inventory in order to drive up rates... [Vevo will be] the only entity to negotiate with advertisers that wish to buy space on music videos." UMG and Google plan to sell ads and then split the profit equally.
Doug Morris and Eric Schmidt, UMG and Google CEOs, respectively, believe this is a new business model that will change the "economic structure of the music industry" and prove to be financially successful.

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Youtube is continuing to have isses with major labels and licensing agreements. On the UK site the negotiations have gotten so bad with the Performing Rights Society that all official music videos had to be striped from the site. Not to mention, on the U.S. side, all of Warner's video has also been removed from Youtube due to licensing disagreements. The message behind these bold moves is clear: Youtube is not a music based website, and thus does not NEED to have music on their site in order to keep it running. While this is a valid approach, it does seem a bit audacious. While they may not be a music specific site, the majority of what they traffic does happen to be music videos. Youtube's stance is that they are following a new business model that focuses on everyone enjoying a comfortable "ecosystem that works for everybody" instead of the older, less effective model, in which each company worries about themselves and how they can get theirs.
So far, the only major label to succefully renegotiate their licensing contract with Youtube has been Sony Music Entertainment. Another major is said to be in talks with Youtube. However, WMG is still a question mark to be solved, along with PRS.

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The Electronic Freedom Foundation, a non-profit that advocates "freedom of speech... in the context of today's digital age," (http://en.wikipedia.org/wiki/Electronic_Freedom_Foundation), is speaking out on the behalf of Youtube users that are disgruntled due to their content being removed from the site. Their argument? "When users incorporate music into their videos, it's fair use, and therefore outside the scope of copyright law and enforcement." This is a ridiculous point, and as far as I can see, it's not being recognized.
The four majors (Sony/BMG, EMI, Universal, and Warner) gave Youtube a blanket license with the condition that they have the right to demand certain videos be removed if they believe the videos are infringing on the Artist's rights. So if these, so-called, upset users want to post videos of themselves lipsyncing to a song off of Sony or EMI's catalog, they'll have to invest in a sync license.
Youtube, outside of this issue they're having with their users, is also having trouble with Warner. While WMG was the first to cut a deal with youtube in 2006, Warner has pulled their license and has demanded that all videos pertaining to WMG be pulled from the site. However, how can you blame WMG when the initial deal they set with Youtube has yet to be reformed, especially since the other majors, who held out for longer, are being paid a larger sum for their blanket licenses? They deserve as big a cut as the others. It's only fair

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In search of a new source of revenue, the music industry has turned to ad-supported online music videos. While this is not a new notion, companies believe it is time to remodel this practice and make it more lucrative.
Statistics show "the number of streams at U.S. online video properties increased from 9.8 billion in January to 12.7 billion in November." With this knowledge at their disposal, all that's left is to shape it into a more productive inlet of income. As of right now, the increased traffic has caused a downward effect. Ad rates have decreased due to the commoditization of the music videos online. Universal Music Group's VP Rio Caraeff was quoted saying that UMG had licensed their videos to a variety of services, and while it was a good learning experience, the numerous licenses they granted has lowered ad rates and thus decreased the company's revenue. When multiple sources are all trying to sell the same videos to the same advertisers, the ad companies then start to lowball the prices.
UMG's solution is to create a third party partner that would then syndicate videos to all the major services (MTV, AOL, YouTube) with ads already embedded into the video.
In a similar case, dealing with the commoditization of music videos, MTV's latest idea is a beta website "MTVMusic.com." This website will host videos, much like YouTube, with additional extras such as artist interviews, live performances, and exclusive MTV footage. They plan to be a serious competitor for YouTube, challenging their sometimes poor video qualtiy and creating an environment that pertains exclusively to music.
Both UMG and MTV's projects will take time. UMG to let their licenses expire and then to renogotiate better contracts, and MTV to get their MTVMusic.com beta project off of the ground. Should they succeed, they will give the industry a much needed boost.