Away from Internet TV and into the world of Youtube drama and music videos. Warner, the first of the major music labels that agreed a licensing deal with YouTube in 2006 has removed all its music videos from the video sharing giant after protracted negotiations fell apart.

Talks collapsed on Saturday due to Warner wanting a bigger slice of advertising revenue pie that YouTube is making. This will affect thousands of videos featuring Warner’s artists such as Red Hot Chili Peppers and rapper TI.

Warner commented:- “We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide,”

Warner’s believe that its origional deal gave Youtube a legitimacy that in turn led to Google Inc’s massive buy out of Youtube for $1.65 billion.

Music companies get a cut of advertising revenue coming from viewers watching their video’s plus a pay per play for each video watched. This is usually a tiny amount but with millions of YouTube visitors it was expected to come to a nice sum.

However, the amounts said to have been received by Warner were “staggeringly low”.

YouTube had been in long negotiations with Warner on how to split revenue from its content until the collapse on Friday.

“Despite our constant efforts, it isn’t always possible to maintain their innovative agreements,” YouTube said in a statement on its blog about difficulties of music licensing. “Sometimes, if we can’t reach acceptable business terms, we must part ways with successful partners.”

YouTube has agreements with many partners and Warner’s move could see others expecting higher fees.

YouTube is currently between a rock and a hard place as it attempts to balance out paying reasonable fee’s to partners, including TV and movie companies, but also make enough revenue on its massive investment.

A compromise is likely as Warner’s videos can be accessed from other places on the net and any revenue in these dark times is better than none.

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