YouTube and Universal Set to Strike Video Deal

Universal Music Group and YouTube/Google are a few weeks away from an agreement over the label’s video rights. YouTube will be responsible for creating a new site, Vevo.com, which would distribute Universal’s video content, and step up advertising revenue with new strategies.

Sony renewed their contract in February, and now Universal, home of U2 and the Killers, will also end their war with YouTube. The soon to be launched Vevo is supposed to generate enough cash to pay for the licensing bill.

The record labels have been in talks with Youtube, and Warner Music actually removed content from the video hub, but Google said that it has been harder to make money off the service than expected, and therefore unable to meet the labels’ high demands.

Selling more expensive ads next to premium content is the plan, and this deal goes further than others YouTube has struck in the past. EMI and Warner, for the time being, are still locked in negotiations.

If all four major labels eventually sell all their rights to YouTube, each with their own distribution platform, how different will it be for the consumer to watch videos?

Source: Wall Street Journal