April 10, 2009
YouTube, Universal To Create Music Video Site
YouTube and Universal Music Group have announced a new partnership that plans to create a new music video entertainment service.
Google, which owns YouTube, will partner with Universal to develop a new Web site called Vevo. The service is expected to launch later this year.
Universal will be responsible for the content while Google's YouTube will be creating the Web site. The two companies will gain a share of earnings from Web ads.
Doug Morris, chief executive of Universal Music, said he is currently discussing Vevo with other record labels and believes they will also join the service.
Eric Schmidt, CEO of Google, said YouTube and Universal Music have renewed their licensing agreement, meaning that YouTube's users will continue to be able to use songs from the record label, while music videos will be exclusive to Vevo.
"This content will be exclusively available through Vevo.com and a new Vevo channel through a special VEVO branded embedded player," YouTube and Universal Music said in a statement.
"Vevo will bring the most compelling premium music video content and services to the world's single largest online video audience," said Morris.
"We believe that at launch, VEVO will already have more traffic than any other music video site in the United States and in the world."
Universal's YouTube channel is currently the most-watched on the site, with more than 3.5 billion views.
YouTube has been cautiously trying to reach deals with record labels while trying to turn a profit.
In December, Warner Music Group took its music video content off of YouTube after the two companies failed to reach an agreement. YouTube signed an agreement with Sony Music Entertainment earlier this year.
The number of US Internet users watching videos at YouTube hit a new monthly high in January, topping 100 million as it dominated the online video arena, according to comScore.
"We believe that at launch, Vevo will already have more traffic than any other music video site in the United States and in the world," Morris said in a statement.
Schmidt said Vevo represents YouTube's first spinoff site, but said he hopes to see more growth in the future.
On Monday, CNET reported that Sony Pictures is in talks about licensing some full-length films to YouTube.
Also, Twitter co-founder Biz Stone responded on Friday to a report that Google wanted to purchase the micro-blogging site by saying Twitter's goal "is to build a profitable, independent company."
"We're just getting started," Stone said in the post.
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