As Warner Music pulls out of its deal with YouTube, the future for music video is at a crossroads. The music labels, who to be fair have invested many millions of pounds in the videos, are still in the mindset that anyone who wants to use their music videos – including archive material – should pay a sizable, non-recoupable fee up front (I don’t know the details of the Google deal but am basing this on previous experience), plus a per usage fee as well.

Entirely logical from their perspective but without a deep understanding of the marketplace for those who would seek to licence the videos. Those assets (aka videos) are commonplace, their market value has just about reached zero, display advertising against them is likely to be run of service (i.e. low single digital pounds per thousand CPM), in-stream advertising is softer than Mr Whippy’s special and the investment in ingesting, presenting and programming those assets means that your return on investment will struggle to be positive.

There are two potential solutions. One is that the labels revise their licensing terms (unlikely if someone the size of Google is unsuccessful) to allow publishers the chance to make some return, and the second is that the labels revise their own technical infrastructure to provide the videos as a service to publishers.

At the moment only one major label is setup to do that and there’s no one body for the indies (market opportunity folks), so we are entering a period where online publishers will rapidly withdraw from licensing music videos and so the labels’ legal team will undercut their marketing and promotions teams.

Time’s are getting increasingly difficult for online publishers and unless the labels loosen their grip, they could quickly find the sand running through their fingers and they’re left holding nothing but memories.