Is YouTube starting to earn its keep?

 

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By Barry Collins

Posted on 19 Dec 2008 at 10:20

Major music labels are making "tens of millions of dollars" a year from YouTube, suggesting Google's video-sharing site is finally starting to earn serious revenue.

Universal Music will earn almost $100 million from music video streaming this year, according to a music industry source who spoke to CNet, with the majority of that money coming from YouTube.

Universal, which includes artists such as U2, Morrissey and Keane among its roster, takes a share of the advertising revenue generated from ads hosted alongside its videos. That deal includes videos on the official Universal channel, as well as user-submitted videos containing Universal artists.

The figures suggest that Google may finally be edging the video-sharing towards profitability.

The company bought YouTube for $1.65 billion in 2006, but has struggled to earn money from the web's leading video destination, despite attracting hundreds of millions of visitors.

In May this year, Google CEO Eric Schmidt said that making money out of YouTube was the company's top priority this year.

That drive has seen the company place a greater emphasis on premium content and the introduction of a new, higher-definition widescreen video format.