YouTube and Warner Music on Sunday signed a deal that allows music videos from Madonna, Red Hot Chili Peppers, and other artists to become available at the popular Web site through an advertising-based system. According to Reuters, the contract will also allow Warner to use YouTube to distribute behind-the-scenes footage, interviews with artists, and original programming.

In addition, YouTube users will be able to use Warner Music songs and videos in the content they create, solving a sticky legal situation that recently led Universal Music Group to call YouTube and MySpace "copyright infringers" that should be paying "tens of millions of dollars" to the record industry.

The strong language led to speculation that Universal will sue the Web sites, but Warner Music executive Alex Zubillaga told Reuters that his company is "trying to lead through innovation as opposed to litigation." YouTube CEO Chad Hurley said that his company is creating technology that will better enable the identification of content and allow for royalty payments, so that Warner and other entertainment firms can remotely manage the licensing of their copyrighted material.

Mr. Hurley commented to Reuters: "We've been in discussions with many of the labels, television networks and movies studios."

Last month, rumors of the impending deal between YouTube and Warner led Jupiter Research vice-president Mark Mulligan to comment: "Any service that YouTube puts in place is, almost beyond reasonable doubt, not going to be iPod compatible. If YouTube can convert its massive online popularity then it could provide a significant reason for people to buy non-iPod devices. At the moment Apple is still the best bet for portable music watching. Either way, it is a nail in the coffin of paid-for services as the dominant online model versus ad-funded alternatives."