Création et Internet
stephen at melbpc.org.au
stephen at melbpc.org.au
Sat Apr 11 04:03:51 EST 2009
YouTube and Universal to Create a Hub for Music
By Miguel Helft times again Published: April 9, 2009
SAN FRANCISCO YouTube, the most popular online video site, and
Universal Music Group, the worlds largest music company, said on
Thursday that they would create an online hub for music videos and
related content, called Vevo.
The agreement is the latest of many efforts by YouTube, which is owned by
Google, to put more professionally produced content in front of its huge
audience, and in turn, earn more money from advertising.
Music videos of Universals artists will be available both on Vevo.com,
which will be powered by YouTubes technology, and on a Vevo channel on
YouTube. The companies said they would share revenue from advertising on
both sites, but declined to discuss specific terms of the agreement.
Vevo is being set up as a separate company that is owned by Google and
Universal, according to a person familiar with the agreement who
requested anonymity because he was not allowed to discuss its terms
Google and Universal said they planned to introduce Vevo this year. They
said they were working to persuade other major labels to join the site.
Industry executives and analysts said the partnership appeared to be an
effort to emulate the success of Hulu, an online joint venture between
NBC and Fox for television shows and movies. While Hulus audience is
much smaller than YouTubes, the site has been able to attract major
advertisers who view YouTubes eclectic collection of video clips with
Music companies were among the first in the media industry to license
their content to YouTube in 2006, and their videos have been among the
most popular content on the site. But those clips have not produced the
revenue that music companies or YouTube had hoped, creating new tension
between the two sides.
In an interview, Eric E. Schmidt, Googles chief executive, said he
thought that the two sides have finally created a model that would
address those issues, by combining Universals content and YouTubes
audience on a site that will be attractive to advertisers.
The music industry has been struggling with how to structure these
things online, in the right way, Mr. Schmidt said.
This is a good model.
Mr. Schmidt credited Doug Morris, chief executive of Universal, which is
owned by Vivendi, with the vision for Vevo. Mr. Schmidt said that the
conversations between the two executives began at the suggestion of the
Mr. Morris said that over the last few years, Universal has gone from
losing $70 million a year in the production of music videos for
promotion, to earning roughly that amount now.
He described Vevo as the next step in Universals ability to monetize
music videos. It is going to be a powerful product, he said.
Mr. Morris said that Vevo would include other content from Universal, and
eventually offer fans the ability to buy merchandise and concert tickets.
The agreement also renews a license allowing YouTubes users to include
Universals soundtracks in their videos. If successful, Vevo could
compete with other online sites for music videos, including MySpace. But
analysts said it was too early to predict whether music fans would flock
to the site.
It takes more than a premium-content destination to really build a
business, said Ross Sandler, an analyst with RBC Capital Markets. Mr.
Sandler said fans could end up choosing to watch music videos on YouTube
rather than on Vevo.
Mr. Morris said he has been in discussions with the other major labels,
which include Warner Music Group, EMI and Sony Music, about joining Vevo.
The labels all said they have indeed been approached, though talks are at
Some of the licensing deals between labels and YouTube have expired
recently, and negotiations over renewals have dragged on as music
companies have sought better terms from YouTube.
In December, Warner Music removed its music videos from YouTube, saying
it simply cannot accept terms that fail to appropriately and fairly
compensate recording artists, songwriters, label and publishers for the
value they provide. Similar disputes have erupted in Great Britain and
The agreement represents a victory for YouTube, which needs more
professional content to lure advertisers to reverse what analysts say are
huge losses derived from the high cost of running the site.
Mr. Schmidt said that the agreement could become a blueprint for
resolving simmering conflicts with other media companies.
It can serve as a model for the nonmusic areas, which as you know, for
us have been problematic, he said.
Ben Sisario contributed reporting from New York.
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