While on the topic of hosting stolen content, The New York Times last night just published a piece that discussed YouTube’s efforts to work with Hollywood:

[…] Mr. Hurley pointed to a deal signed recently with Warner Music that he hopes will be a model for dealing with Hollywood and record companies from now on. YouTube is developing technology that will identify Warner music used in a video that is uploaded. When the site plays those videos, it will share some of its advertising revenue with Warner and others with copyrighted material that is used.

This “second component” of the Youtube/WMG deal is much more interesting than the repoted agreement to publish music videos.  Youtube is trying to figure out a way to legally support people who want to make user generated content with copyrighted music.  WMG group has admitted that they can’t control what people do with their music and they should try to deal with this reality and build a business around it.

Meanwhile, the studios are experimenting with granting rights to their IP in very limited and controlled ways such as Looney Tunes “Toonify”.

I think WMG is the most innovative of the big record companies and it will be interesting to see how this plays out and if anyone follows suit.