Report: UMG's Doug Morris Says YouTube And MySpace Owe Company "Tens Of Millions Of Dollars"

During a MERRILL LYNCH investors' conference speech on TUESDAY (9/12), UNIVERSAL MUSIC GROUP CEO DOUG MORRIS accused YOUTUBE and MYSPACE of being "copyright infringers," reports REUTERS. The new service obtained a transcript of the speech (which was closed to the press) during which MORRIS remarked, "The poster child for (user-generated media) sites are MYSPACE and YOUTUBE. We believe these new businesses are copyright infringers and owe us tens of millions of dollars."

Added MORRIS, "How we deal with these companies will be revealed shortly."

"His remarks strongly suggested the company was planning to take legal action in the near-term to either prevent the illegal use of their content on these Web sites or to ensure the company is compensated for the use of its content," JESSICA REIF COHEN, analyst at MERRILL LYNCH, wrote in a note on WEDNESDAY (9/13).

Continued COHEN, "This could be the first salvo from a content player against business models based on user-generated content, much of which relies on copyrighted material."

Because UNIVERSAL has been in negotiations with both sites to offer its artists' music legally for a fee, it's not known whether or not MORRIS' remarks represent a negotiating tactic or an actual warning of imminent legal action.  Both MYSPACE and YOUTUBE declined to comment on the story. 

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