Universal Music and YouTube close to music video site deal

Universal Music Group and YouTube reportedly are near a deal that would create a new premium music video website. Vevo, the site's working title, would be closely affiliated with YouTube and would be the largest music site on the Internet in all likelihood.

Universal's channel on YouTube is very popular already, accounting for more than 3.5 billion video views.  This joint venture is the brainchild of Universal Music Group CEO Doug Morris, who has been leading an effort to monetize the label's music videos online to the point that it's a standalone revenue stream.

The features associated with the plan, such as artist interviews and artist-produced content, lend Vevo to the style of CBS's TV.com, which places related print and image content around the TV shows it streams. The deal between Universal and YouTube would likely see Universal taking a larger percentage of revenue than it currently sees from YouTube from advertising around the music videos.

Vevo's future ambitions include creating a destination site with all of the major record labels where they could sell tangential products and downloadable music videos. With music labels' business models in shambles, the industry needs to figure out a coherent, consumer-friendly online business to replace its declining album sales. Perhaps the Vevo model will give them the substantial online presence they have yet to develop. 

For more:
- see the CNET story here 

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