Warner Music loosens grip on music videos

AOL Time Warner subsidiary Warner Music Group says it will license its music video catalog to online entertainment provider Intertainer.

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AOL Time Warner subsidiary Warner Music Group said Tuesday that it will license its music video catalog to online entertainment provider Intertainer.

The move marks Warner Music's first content licensing agreement since America Online and Time Warner =" news="" 0-1005-200-4427568.html"="">completed their merger in January.

Video licensing deals by the major record labels are relatively common and lack the controversy that surrounds music licensing. This is largely because music videos do not generate revenue, but rather function to promote CD sales and artists.

"There's not really an over-the-counter video market that stands to get cannibalized by redistributing videos on the Web the way that CDs are feared to be impacted," Jupiter analyst Aram Sinnreich said.

Just recently, EMI Recorded Music unveiled a similar video licensing agreement with Intertainer. Sony Music Group licenses some of its video content to the company as well.

In contrast, none of the major labels, which also include BMG Entertainment and Universal Music Group, have broadly licensed their audio content for fear of hampering CD sales. The pressure is on to do so as more music fans seek their favorite songs in digital format, often through controversial sites such as file-swapping service Napster.

Tuesday's announcement caught the attention of analysts and industry experts, who are watching to see how AOL Time Warner will handle the licensing of its proprietary music content.

Thus far, the newly merged company has expressed no interest in partnering with Bertelsmann, parent of BMG and Napster, in its planned subscription music service. Instead, it is commonly thought that AOL Time Warner will create an in-house music subscription service using Warner Music's content.

The Intertainer agreement doesn't suggest any different, analysts say.

"Audio content is a horse of another color; they're much more protective of it," said Sinnreich. "I think today's announcement betokens very little about (Warner Music's) pure recorded music strategy. I would hesitate to read too much into this deal.

"I think it's much more likely that they'll license their content to companies like Loudeye and MP3.com before they do to rival media companies such as Bertelsmann (or) Vivendi Universal."