Google may be in serious trouble if these big music labels have their way. YouTube has become, among other things, the most popular place on the Internet to watch music videos, but due to the fact that the ads on these videos aren’t creating as much revenue as they’d like, some of the music labels that own the rights to these videos are considering pulling the content from YouTube. This couldn’t come at a worse time either, as Facebook has started to aggressively steal shares of the video sharing market and the removal of music videos wouldn’t be a major blow to YouTube,
YouTube’s exploding mobile traffic is creating a new source of friction between the world’s No. 1 content distributor and the music industry, numerous sources told The Post. Universal, Sony and Warner execs believe YouTube’s grip on free ad-supported music videos needs to be loosened — by supporting rival sites like Vessel and Snapchat, sources at each of the labels said. Separately, the labels are weighing going nuclear — potentially yanking rights to the Web’s most valuable and highly trafficked content. “They are not serious about monetizing music on behalf of creators and, as a result, music companies are realizing they have to reset the current relationship,” one senior industry source said. “They are fed up with the lack of monetization,” said another label source. “When you look at how music is monetized from lowest to highest, YouTube is at the bottom.” While consumers love free ad-supported music, the labels are much less enamored of the format. Each company is struggling to build profits in the face of declining downloads — and is lobbying for a better balance between free and paid services, sources said.
