After Youtube’s recent spat with Warner music, a breakaway group are planning to take their music away to Hulu and compete with the video giant.

A new music video website may be in the wings after Warner failed to agree on a new contract with Google. YouTube has already removed thousands of music videos from top artists that include Madonna, James Blunt and Red Hot Chili Peppers amongst other big names and Warner has insisted that all its songs are pulled from the site.

Although music companies operate a revenue share with Google when a video of theirs is shown with varying degrees of success. Warner have been quoted as saying it madea ‘negligible amount’ whilst Universal has said it made ‘tens of millions’ from video shows on Youtube.

The companies currently make cash using a ‘pay per play’ fee YouTube gives them each time a video is watched. Youtube are looking to make this amount smaller but give a larger share of ad revenue to the companies.

The music companies feel they can pressure YouTube into giving a better deal by threatening to pull out. A lot of YouTube content uses musical content which is owned by them. And a deal with either Hulu or MySpace Music (owned by News Corporation) could help to get a better cut from Youtube

However a musical Hulu site is still in the early stages. And it has been argued that Hulu will not pose a threat to YouTube as it does’nt attract the right demographic, and they doubt that a music version would seriously affect the Google owned video giant.

One exec said:- “Hulu offers premium content only, and for that market it works. YouTube is a different proposition and has a different demographic. It’s a different person who wants to watch clips and amateurish stuff made by fans from the sort of person who will sit back and watch a half-hour show.

“I think it’s a mistake to hold Hulu up as an alternative; it’s not. It’s an additional service.”

He said Universal had done well from its YouTube deal because it had “a lot of content that people want”. And that “Warner is not a company in great shape. I don’t hear advertisers getting worried about this, ” he said.

“Why should we accept less from YouTube when there are better offers with Yahoo, MySpace, MTV and AOL?” said one executive. He said that the irony was that music lovers would end up using Google to search for their artists anyway.

“They just won’t be watching those videos on YouTube. There have been other hot brands on the Internet before. What’s Napster worth now? But these names come and go. Catalogues like Led Zeppelin or Madonna are more enduring.”

Whichever way you look at it, there is a power struggle going on between David and Goliath. And competition is a good thing, right?

Related posts:

1. Youtube spat with music industry in the UK
2. Warner in Youtube spat
3. Youtube Streaming One Billion Videos Per Day
4. Hey Hulu, Disney is swinging toward Youtube
5. Google Overpaid For Youtube By A Billion Bucks