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YouTube Clears Copyright Hurdle

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NEW YORK YouTube auteurs will soon be able to use Warner Music selections in their videos—and share in a portion of the resulting online advertising revenue.

The agreement covers Warner artists like Radiohead and Missy Elliott, and it comes at a time that online music copyright issues on social media sites have been heating up. Just last week, Universal Music chief Doug Morris said YouTube and sites like MySpace owe "tens of millions of dollars" from copyright infringements.

Warner will receive an undisclosed percentage of ad revenue from videos that include any company-licensed content—audio or visual.

The YouTube-Warner pact is one of several the video-sharing giant hopes to strike with copyright holders, in part to combat its reputation as a haven for pirated content, from unauthorized clips of The Daily Show to lip-synching videos.

Warner said it is embracing this latest new distribution vehicle rather than fighting it.

"Consumer-empowering destinations like YouTube have created a two-way dialogue that will transform entertainment and media forever," Warner Music Group CEO Edgar Bronfman Jr. said in a statement. "As user-generated content becomes more prevalent, this kind of partnership will allow music fans to celebrate the music of their favorite artists to reach consumers in new ways, and ensure that copyright holders and artists are fairly compensated."

Sorting out the complex tangle of rights issues has become more pressing as YouTube moves to create a sustainable, ad-based business model. Last month it introduced user-initiated "brand channels" as its first major advertising program. So far the company has abstained from inserting ads in video clips.

YouTube said it would implement a "content identification and royalty reporting system" by the end of the year that would allow it to share ad revenue with copyright holders.

For now, YouTube does not share ad revenue with either content creators or copyright holders. Rivals like Revver hope to recruit users to their service by offering them a cut of ad revenue generated.

Warner will also use YouTube to distribute music videos, giving it access to YouTube's growing audience. In August, the site attracted 34 million visitors, up from 3.5 million at the start of the year.