The BBC is reporting that YouTube have signed a deal with Warner Music that will allow them to not only feature legal music videos on the video sharing site, but it also will officially legalise YouTube users’ home-made videos that feature any Warner Music titles.

Apparently, YouTube has implemented a system whereby they can track when copyrighted content from Warner is being used, and Warner will receive royalties relevant to the amount of their content on the site.

This is a serious move by YouTube as many were starting to doubt whether the service would survive, with a very high level of litigation threat from the media giants (over all the user-generated content that used copyrighted content). This move however, not only removes that threat from Warner, but it signals the intent of YouTube to the rest that they want to stay within legal boundaries.

It also could be a signifier of the evolution of YouTube. For some time, the site has boasted very high traffic rates and is quickly becoming one of the most popular sites on the web. However, as yet YouTube haven’t really been able to capitalise on that traffic and turn it into much revenue. This move by YouTube may show that they are starting to think about ways to monetise the vast amount of traffic they receive each day.

This deal may well prove to be the pivotal movement for YouTube in terms of revenue; from being another site with Google AdSense to being a true money-making source.