YouTube in talks with Universal

• 6th Mar 2009

YouTube are currently in talks with Universal regarding setting up a
stand-alone premium music video web-site. The site, which would be called
Vevo is expected to generate much higher advertising revenue then the Google
owned YouTube does for Universal.

It would feature artist driven content along with music videos, although it
is unclear how these would be delivered and what (if any) digital rights
management would be attached. Other major labels have already been
approached to join the service, just as they are all re-negotiating their
current licensing contracts with YouTube.

“The labels learned the hard way that music videos were more than just a
means to promote music and artists. The story is legend now but MTV built a
huge business on music videos while paying the labels little.
Universal executives last year said the label sees revenue in the “tens of
millions” from YouTube.” (CNET) Both Universal and Google are looking to
capitalise on this and control press coverage and revenue streams from music
videos. This is achieved by music companies receiving a portion of the
advertising revenue from the videos, as well as pay per play.