The last of the big four record labels has signed up to Google's YouTube to allow its music to be used on the video sharing website. The decision comes as private equity groups and rival Warner mull bids for the company.
The deal will allow YouTube users to include clips from EMI artists' music in their own videos. The content will be tracked by YouTube's own technology, EMI said.
"With this deal, all four of the world's major music companies are now official YouTube partners," said Chad Hurley, chief executive and co-founder of YouTube.
The financial terms of the deal were not disclosed, but the companies said that YouTube will share advertising revenue earned on the pages on which EMI music is used.
EMI will then use YouTube's content management system to track usage and share any income, the record label said.
Universal, Sony BMG and Warner have all already cut deals with Google over the YouTube service. Those deals also allow the use of music as a backdrop to users' videos.
Other entertainment companies have been more reluctant. Film and television company Viacom is pursuing a $1 billion copyright infringement law suit against Google, alleging that the YouTube business is founded on infringement.
Google's chief executive Eric Schmidt said this week that he thought the lawsuit was an error. "It was probably just a mistake," he told the D: All Things Digital conference.
Schmidt said that the crux of the suit was the Digital Millenium Copyright Act, and that his company was shielded by the 'safe harbor' provisions of the law, which say that a service provider does not have to vet content before allowing a third party to publish it.
"It's really about the DMCA," he said. "It's pretty clear that there's a safe haven for sites like ours."
Safe harbor protection says that a service provider is not liable for illegal content posted by third parties until it is informed about it. Once told, it must then take down the content, according to the law.
Viacom, which owns the rights to television channels such as MTV, Nickelodeon and Comedy Central, said that it does not believe that YouTube is eligible for safe harbor protection, and that it is profiting from infringement.
EMI is currently fielding bid proposals. While rival Warner is keen to make an offer for the company, EMI has said that it must be high – over 300p per share – because it is dependent on regulatory approval, which could take up to a year.
Private equity firm Terra Firma is the favourite to win with its offer of 265p per share, valuing the company and its debt at £4 billion.