YouTube, Universal Music to create music video site

Tools

YouTube and Universal Music Group confirmed partnership speculation Thursday, announcing an agreement to co-sponsor a new site for music videos called Vevo. Google, YouTube's parent, and Universal agreed to share advertising revenue from the site, but declined to comment on specifics. As part of the deal, YouTube licensed Universal recordings for use in user-generated videos on the site.

"Vevo will bring the most compelling premium music video content and services to the world's single largest online video audience," Doug Morris, chairman and chief executive of Universal, said in a press release. "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."

Music videos have always been one of the most popular types of videos on YouTube, and record labels like Universal have benefited from the advertising revenues associated with them. Now, both parties have reached an agreement that will send more revenue YouTube's way, at a moment where analysts are pointing at huge deficits for the online video king, while maintaining Universal's share of revenues as owner of the rights to the content. This announcement marks a continued effort by YouTube to get more premium content, which command higher CPMs, in front of its hundreds of millions of users. 

For more:
- see The New York Times blog post here 

Related articles
YouTube and Sony Music reach music video agreement
Warner Music takes videos off YouTube