A few days after Universal Music threatened YouTube with court action over unlicensed use of its material, Warner Brothers has signed a deal with the video sharing site.

YouTube and Warner will share revenue from advertising on both music videos and user uploaded videos that incorporate audio and audiovisual works from the Warner catalogue.

Set for release by the end of the year, YouTube is working on a content identification and royalty reporting system to detect when videos on the site are using Warner material. It will then to calculate how much is given to Warners in ad revenues. Warner will also be able to review homemade videos and decide whether they are suitable.

Warner Music chairman Edgar Bronfman said:

“Consumer-empowering destinations like YouTube have created a two-way dialogue that will transform entertainment and media forever.”