In spite of all the chest pounding by Universal Music Group, which is acting ignorantly in my estimation, Warner Music Group understands that the best way to get a piece of the action for its business, is to connect with the online communities on the Internet. They did it on Sunday by inking a deal with YouTube; the video sharing site. It's the first commercial partnership with the online site and the entertainment industry.
While Warner and YouTube already had an advertising deal, this is the first deal connected commercially to the music and artists.
The deal will use an advertising model whose revenues will be shared between YouTube and Warner. Not only will the revenue be shared with the artists, but also with the user-generated content created by the music fans.
A smart and unique move made by both parties was to allow the music from Warner's entire catalog to be used in the user-generated videos. This should make the users of the site happy and create a lot of good will for the two companies.
As I said on another blog, "The only thing missing from this is I think that the user-generated content could have had some incentives included in the deal."
I think this would have created a tremendous incentive and would have been rewarded with tremendous loyalty from the users. Do you think that would have really enhanced the effect of the overall deal?
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