10/19/2006 - Major Labels Grab YouTube Stake, MySpace Remains King

Sony BMG, Universal Music Group, and Warner Music Group have all gained an ownership sliver in YouTube, according to a recent New York Times report. YouTube, now a $1.65 billion Google acquisition, issued the ownership stakes during recent licensing rounds. That could generate a quick, $50 million payout, though specific details of the negotiations remain unclear. EMI has been rather quiet in the process, though its deal is likely to resemble the others. Meanwhile, a fresh report from comScore Media Metrix revealed that MySpace parent Fox Interactive Media is actually the online video kingmaker, doubling YouTube volumes with 1.4 billion streams in August.

Ahead of the Google purchase, Mark Cuban called any potential buyer a “moron,” and some are wondering if the internet billionaire will ultimately be validated. Media heavyweights are now swirling around YouTube, leaving ownership stakes, content control, and a potentially litigious landscape ahead. A resulting maze of agreements and legal threats could neuter some of the untamed energy that made YouTube famous, though Google has a far grander vision for the property. Meanwhile, fresh lawsuits by Universal Music Group against both Grouper and Bolt could create interesting precedents, potentially paving the way for a broader assault against deep-pocketed Google.

New York Times "Music Companies Grab a Share of the YouTube Sale"