Universal Music chief Doug Morris launched a loud salvo at YouTube, warning the upstart Internet firm that it could come into the legal crosshairs of the world's largest music company.
YouTube, the prolific swapper of videos online, consistently violates the music industry's copyrights when it allows users to post videos, Morris said in a speech at a Merrill Lynch conference in California.
Morris' cage-rattling could signal the first legal fight on behalf of a major content company against YouTube, which was founded less than two years ago but has quickly become the dominant online video site. According to industry data, some 60 percent of videos viewed online come from YouTube.
A mega-lawsuit over copyrights would complicate YouTube's plans to sell itself to a major media company or launch an initial public offering.
As more video content hits the Web, YouTube is now seen as the Internet's hot property and many on Wall Street and in Silicon Valley are betting on its acquisition.
YouTube did not respond to a request for comment.
"What doesn't work for us are companies trying to build businesses using our content without our getting a fair share," Morris said.
Morris related a frequent historical gripe often mentioned by music execs, saying the industry made a costly mistake in the 1980s when it agreed to give MTV free music videos. At the time, the industry saw the fledlging video trend as mere publicity to sell albums, rather than as a revenue generator itself.
"The poster child for this was MTV," Morris said. "Twenty-five years ago, they built a multibillion-dollar company on our software.
"They received the software for virtually nothing. We learned a hard lesson. Recently, companies like Yahoo! and AOL started video on demand running ads between our videos. We asked for payment; they said no. We took down our videos and they said yes. Now we share in their advertising revenue."
Morris said YouTube and other sites "owe us tens of millions of dollars. How we deal with these companies will be revealed shortly."
The four major music companies, also including Warner Music, EMI and SonyBMG, have been in talks with YouTube about licensing arrangements, but so far no deals have been reached.
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