updated 12:50 am EST, Thu March 5, 2009
YouTube and Universal
YouTube and the Universal Music Group are allegedly involved in discussions of a licensing agreement regarding the creation a new site for music videos and other related content. Unnamed sources told the New York Times that Google's online video service is aiming to build premium content areas to lure higher-priced advertisements, although the negotiations are ongoing and the terms have yet to be set.
The agreements could lead to an increase in revenue for both companies. Music videos have proved popular on YouTube, but without providing a significant contribution to profits. The new site may extend beyond just music videos, however, with other content involving individual musicians and bands.
Licensing between YouTube and record labels is not new, but the companies are attempting to reconfigure terms from agreements dating back to 2006 and 2007. The previous terms may not still be attractive to the music companies, with a small fee received for each video played and a share of the ad revenue.
While Sony recently signed a deal with YouTube, Warner pulled its content from the video site late last year because it "simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide."
Google's CEO Eric Schmidt said in an investor conference call that the the parties were currently held back by a disagreement regarding "how to compensate the music industry for the use of their music in things which are promotional."