YouTube and Universal Music Group Partner to Form Music Video Site

After announcing partnerships with ESPN and Disney-ABC Television Group and expanding its Click-to-Buy program last week, YouTube has taken another step towards better monetizing its services by partnering with Universal Music Group (UMG) to create VEVO, a new music video site. VEVO will feature premium video content from UMG—and potentially other major labels in the future—and will be owned by both YouTube’s parent company Google and UMG. The companies will share ad revenue from the site.

On the YouTube blog, Partnerships Director Chris Maxcy explains, “This service will blend UMG’s broad catalog of artists and content production capabilities [UMG is the world’s largest recording company] with our video technology and user community—in other words, we’ll provide the technology infrastructure that will power VEVO and host UMG’s extensive library of professionally-created music videos on the new site. This content will be exclusively available through and a new VEVO channel on YouTube through a special VEVO branded embedded player. It launches later this year.” Per the agreement, users will also be able to create and watch videos containing UMG sound recordings.

According to The New York Times, YouTube is hoping VEVO will reproduce the kind of success that Hulu, an online video site from NBC and Fox, has had in the past few months. Although Hulu is less than a year-and-a-half old and attracts a smaller audience, it has been able to pull in strong advertisers. Moreover, Hulu viewership is growing steadily, increasing 55% between January 2009 and February 2009 to reach 7.8 million visitors.

The UMG partnership should also help YouTube circumvent some of the legal troubles that it has faced in the past over the use of copyrighted music. Google is currently embroiled in an ongoing $1 billion copyright infringement lawsuit filed by Viacom. Google CEO Eric Schmidt told the Times that the agreement with UMG could become the model for resolving future conflicts between media companies.

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