YouTube, Warner Partner; Universal Threatens

Depending on which music label you talk to, YouTube is either a friend or foe. The company on Monday said it had reached an agreement with Warner Music to stream music videos, behind-the-scenes footage, artist interviews and original programming. Contrast this with Universal, which apparently threatened to sue the video-sharing site last week.

The deal with Warner is expansive; not only does it include the rights to stream video content from the fourth-largest record label, but it would also give rights to users to incorporate Warner music into the videos they create and upload. Revenue from advertising appearing on pages with Warner music would be shared, YouTube said.

Calculating revenue, as well as protecting the content from Warner, would require some changes on YouTube's part. Thus, the company announced it would be making modifications to its system as a result to ensure the integrity of the videos streamed.

Meanwhile, while all seems to be rosy with Warner, YouTube is facing what appears to be a imminent lawsuit from Universal Music, whose CEO Doug Morris told investors last week that the video sharing site along with MySpace owed Universal tens of millions in royalties and planned to "reveal shortly" actions against the sites.

Universal and YouTube had been in discussions, but those have apparently fallen apart. The site already has a deal with NBC, signed in June, which included Universal television shows. However, the music arm is no longer aligned with that division, which explains the mixed message sent by the two companies.

A spokesperson for Universal later backtracked, saying Morris was answering a question from the audience and was not outwardly threatening legal action. Representatives from YouTube were not available for comment.