Warner pulls all music from YouTube

Warner Music Group has pulled thousands of music videos from YouTube, after negotiations over payment with the video sharing site stalled.

The original contract between the organisations allowed YouTube to stream Warner material in exchange for a percentage of advertising revenue.

However, Warner is reportedly unhappy with the amount of money being offered and is demanding better royalties and more competitive advertising rates.

"We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide," said a Warner spokesperson.

Music videos from artists including Madonna, Red Hot Chili Peppers and James Blunt will now be pulled from the site.

YouTube is the world's third most-visited website, after Yahoo! and Google. However it is thought that Warner generated less than 1% of its annual digital revenue from its partnership with the site.

"Every day we work with the music community to license your favourite music for you to use on YouTube. But music licensing is very complicated," YouTube said in a statement. "Sometimes, if we can't reach acceptable business terms, we must part ways with successful partners."

The site has reportedly cited the costs of hosting and streaming music videos as the reason why it cannot pay more.

Warner is expected to continue distributing music videos with other websites with which it has existing licensing agreements, including MySpace and AOL.