Youtube and Timewarner Emerging

Leeds, Jeff. (2006, September 19) Warner Music Makes Licensing Deal With YouTube. The New York Times. Retrieved October 19, 2006, from

http://www.nytimes.com/2006/09/19/business/media/19tube.html

The article I reviewed discussed an e-commerce business agreement between two corporations, Youtube Inc., and Warner Music Group. Youtube Inc. is a popular online website that generates thousands of videos as well as, music videos which viewers can illegally download on an everyday basis. In opposition, Warner Music Group is a huge production firm that sets copyrights to artists’ music. The battle between the music industry and the online file sharing of particular internet sites has been going on for numerous years; and yet this conflict has never been resolved. Until now, Warner’s EVP of digital strategy Alex Zubillaga announced that “our general philosophy is, we want to lead through innovation as opposed to litigation.” In other words, Warner Music is going to team up with Youtube instead of fighting them and allow the site to legally submit to their viewers the copyrighted material owned by Warner Music. In return as apart of the agreement, Youtube is offering a certain percentage of the advertising fee to Warner for every video file shared. Then Warner can use this new revenue to give back to the artists as well as pocketing some of the money for Warner itself.

This article best connected to chapter 8 of our book. It includes using e-commerce which enables profitable changes within the business environment. It also involves peer-to-peer file sharing which allows viewers to upload their favorite videos and/or music for their personal usage. Within combining the two companies, or Convergence, the managerial decisions that the companies faced had a huge impact on raising