Major record labels take small stakes in YouTube

NEW YORK - Three major music companies have bought small stakes in YouTube, in a further sign that threats of legal action for copyright violation of music videos may be avoided.

Universal Music Group, Sony BMG Music and the Warner Music Group have each bought small into the video sharing site, according to a report in The New York Times.

The paper says that the deals were struck before YouTube's acquisition by Google for $1.65bn (£883m) was announced.

Detractors had said that the investment in YouTube was foolish because the site is still working on ways of making money from its enormous popularity and that it faced the threat of legal action from copyright owners of music videos that are uploaded without permission.

Earlier this week, Universal revealed it was taking legal action against two other video sharing websites, Bolt.com and Grouper.com, about unauthorised content.

YouTube's deals with Universal lets the site host thousands of videos from Universal artists for a fee, along with a commitment to filter out unauthorised content.

The New York Times reports that the three music companies could collectively make $50m from their agreements with YouTube.

However, YouTube could still face legal action from entertainment companies over the inclusion of film and television on the site.

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