YouTube announced that Warner Music Group will distribute and license its copyrighted songs and other materials through the companies system. The deal is fairly simple, YouTube will share ad revenue with Warner. The neat part for YouTube’s users is that Warner is going to extend the license to the users for use Warner’s songs in their homemade videos. Very smart!

This deal is very big. Warner, including labels such as Atlantic, Asylum, Elektra and Rhino, is the third largest recording company with revenues greater than $3.5 billion. It is big for Warner, big for YouTube and most of all big for all those kids making videos lacking background music…