YouTube partners with Universal for new music site

 

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By Reuters

Posted on 5 Mar 2009 at 13:51

YouTube and Universal are in talks to create a premium online music video service, according to reports.

The deal would see the two create a stand-alone site to showcase music videos by Universal artists, as well as related content designed to garner higher advertising rates than now available through YouTube.

The site, provisionally dubbed Vevo, could also offer other merchandise, such as concert tickets and clothing lines, the sources claim.

"UMG CEO Doug Morris came up with this idea to do a Hulu for music but only with premium music content," says one person familiar with the matter, adding that other music companies have expressed interest. "We literally just started negotiations."

If they reach a deal, the service could mark a significant step forward in Google's attempt to generate revenue from YouTube, which it acquired for $1.65 billion in 2006.

A deal would also represent a broadening of the sometimes fractious ties between YouTube and the media industry, which has on occasion ordered the popular video-sharing site to pull down clips of TV shows or music videos uploaded by users without permission.

Universal's current licensing deal with YouTube expires at the end of March, and a new deal is expected for April. EMI is also in contract renewal talks with YouTube. Sony Music renewed its contract with YouTube last month.

"We are always working with our partners to find creative ways to connect music, musicians, and fans," says YouTube in a statement.