Google + WMG: Hints of Dysfunctionality Emerge

The stare-down between Warner Music Group and Google-owned YouTube continues, thanks to some serious differences in opinion.

Ahead of Christmas, Warner started pulling content based on dissatisfaction with Google’s payout structure on played videos.  Many of those user-generated videos have now resurfaced, though Warner continues to actively remove its intellectual property.

So, is Google screwing the labels?  That was the purposely-provocative question posed by TAG Strategic managing partner Ted Cohen in a keynote interview with Google vice president of content David Eun.  The question itself was laughably stark, though Eun alluded to a hardline negotiation tone coming from the music industry.  “There is a culture that says, ‘these are my interests, meet them, and if you meet them, then maybe we’ll let you have access to our content’,” Eun relayed.  “In that sort of approach, there’s really not a concern for the other person’s business.”

The demands appear to be chafing the innovative sensibilities of Google.  “If that becomes systemic, what you find is that you decrease the number of companies and partners that you have.  So the question that I pose to the industry is, ‘how much innovation is really going on in the music industry, and how much more could there be?’  I don’t think we have the answer, and neither does the music industry.”

That said, Eun noted that music is “more important than any other type of content that we have,” though YouTube clearly draws a diverse range of interests.  That importance gives Warner Music Group leverage, especially if users have problem finding their content.  “We appreciate that there’s a core business that still makes a lot of money, and there are ways to still experiment and innovate that support your core business,” Eun continued.  That includes click-to-buy buttons, as well as other video tie-ins like tour dates.

Report by publisher Paul Resnikoff in Cannes.