Warner Music recently pulled their artists’ music videos from YouTube after negotiations between the two companies broke down. Warner Music is seeking an increase in the fee they receive when one of their videos is watched on YouTube. There is also rumor that a group of major music labels, including Warner Music, are considering founding their own rival to YouTube. The proposed new site would be similar to Hulu, a partnership between major television networks to offer full programs online with commercials.

It will be interesting to see the direction YouTube chooses as it begins to accrue rivals. Three years ago when YouTube was first becoming popular it was essentially the only site specializing in providing video on demand. Hulu seems to be less of a threat to YouTube because YouTube’s strength is providing brief clips rather than half hour programs. A music video website launched by major music labels would be a real threat to steal some of YouTube’s traffic as music videos are a major chunk of YouTube’s content. It is not wholly unlikely that we will reach a point where most large corporate content providers either provide content on their own websites exclusively or via consortiums like Hulu, at which point the interest in YouTube’s more grassroots content will truly be tested.

I believe YouTube will have staying power even if it loses most of its major corporate content. YouTube will be moving from being the entire online video encyclopedia, to being primarily a site for user generated content. But as we’ve seen users love uploading videos to YouTube and some people have even been able to launch careers that way. I also cannot imagine YouTube losing favor among smaller entities like independent record labels. For smaller entities YouTube’s market dominance is a chance to easily make your work available to a vast audience rather than a threat to your profit margins. I imagine this is what Google envisioned with their purchase of YouTube in 2006, despite some critics’ concern that YouTube would fold or be unprofitable without full corporate support. There was never any reason to believe corporate content providers would stick with YouTube as it became easier and made more business sense to host their own content but it is difficult to envision the entirety of the internet suddenly deciding they no longer want to share videos with each other.