Youtube and Universal to open new music site
Youtube and the Universal Music Group want to jointly open a new video site under the name Vevo. The portal must show clips from well-known Universal artists and must be completely self-supporting with advertising revenue.
The new website should be up and running within a few months and will offer video clips from artists such as U2, 50 Cent and Kanye West in a higher quality than most YouTube videos currently do. Under the agreement, the music site will be owned by Universal, which in turn is part of French media conglomerate Vivendi. Vevo’s advertising revenue will be shared between YouTube and Universal. In addition, Universal has indicated that it wants to enter into talks with other music publishers to join its plans for a premium video portal. reports Reuters.
The two parties hope to be able to attract more advertisers with the establishment of a new video portal separate from Youtube, which should allow higher advertising rates. In doing so, the parties appear to have looked into the success of video portal Hulu, owned by NBC Universal and News Corp. Hulu serves its visitors popular TV series and a number of films, and is able to attract more major advertisers than YouTube.
The agreement with the music publisher is therefore very welcome for YouTube, part of Google. Despite the high visitor numbers, the portal is unable to become profitable, because it has to charge low advertising rates. In addition, music publisher Warner refused to sign a new license agreement with Youtube at the end of last year and the portal is increasingly forced to take videos offline to avoid copyright conflicts.
In addition to the deal with Universal, Cnet knows report that Sony Pictures has confirmed that it is in negotiations with Youtube. The film studio would like to place full movies on the Youtube portal in order to attract more visitors to its own video portal Crackle. However, YouTube users should not embed the movies on other websites; Insiders expect that Sony Pictures will only want to place a few films on Youtube and decide for itself who advertises with its content.