MUMBAI: Google’s video sharing site YouTube and music label Universal Music may soon join hands to create a premium site for music videos.
A news report in the New York Times today suggests that discussions over the licensing agreement are on. However, the final deal could be weeks away and over the period, the terms may be different from those being discussed currently.
Universal approached YouTube with the idea at the end of last year and proposed a site that would include videos from all the major music labels. Under the partnership being discussed, YouTube would provide the technology to sell advertising accompanying music videos.
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With declining rates in the physical sales, record labels are seeking to boost revenue from the digital medium as a way to
compensate the losses. Google CEO Eric Schmidt said at an investor conference recently that YouTube is slowly working out ways to make money from online videos.
Meanwhile, all the major labels are trying to renegotiate licensing agreements with YouTube that were signed in 2006 and
2007. Labels were disappointed with the earlier agreements becasue it gave a very small share of advertising revenue and
videos watched.
To generate a revenue stream, YouTube had recently added options next to some of its videos which fans could click to buy songs from iTunes or Amazon.com. A share of the revenue generated from this goes to the music labels.
In December, Warner Music Group removed its music videos from YouTube saying it simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide….
The proposed agreement between YouTube and Universal Music Group is more sweeping than existing deals and could include the creation of a site that showcases not only music videos, but also other content related to musicians and bands, according to the person briefed on the discussions. But it’s unlikely that the deal will result in a joint venture the news report mentioned.
