Google, Universal Music partner on new music video site

Universal Music CEO Doug Morris is partnering with Google's Eric Schmidt on Vevo.

(Credit: Universal Music Group and Stephen Shankland)

Universal Music Group and Google are now partners in the music-video business.

The largest of the four top recording companies and YouTube's parent company announced on Thursday that they are working together on Vevo, a new music and video entertainment service set to launch later this year. YouTube will handle the technology while Universal Music supplies the content. The two companies will share ad revenue.

The companies said and at this point it appears that Universal's content and artists will be the only label represented on the site. However, Doug Morris, Universal Music's chief executive, said in a conference call with the media that he is in negotiations with other top record labels and is confident they will join.

Google CEO Eric Schmidt said on the same conference call that YouTube and Universal Music have renewed their existing licensing agreement. YouTube will continue to be licensed to allow visitors to use songs from Universal Music. Professionally made videos from the label will only appear on Vevo, the companies said.

This is the first time that YouTube has launched a satellite Web site, Schmidt said but he added that he hopes there will be more.

For Universal Music, the move means that Morris has obtained the standalone music-video service that he has long wished for. Ever since MTV became a cultural force and huge financial success by offering music videos on TV, the record industry realized that it goofed in thinking of music videos as a promotional tool. Morris has said that in this era of declining revenue in the sector, he doesn't see anything as "promotional" and argues that music videos are worth cash.

In September, CNET reported that Morris was looking for a way to build his own video site. It appears now that Morris already had the partner he needed in Google. Sources close to Universal Music said last year that Morris wanted his artists' videos to be given a higher profile and presented to viewers with higher-quality video than what YouTube offered. But where could he go to find an audience as gigantic as YouTube's? Vevo undoubtedly will have what Morris wanted.

For Google, which acquired YouTube in 2006, the agreement continues the company's streak of signing partnerships with top entertainment companies. For the past year, YouTube has been steadily shedding its rogue reputation among music, film, and TV companies.

On Monday, CNET reported that Sony Pictures is in talks about licensing some full-length films to YouTube.

When it comes to challenges, the new joint venture faces plenty. While Universal Music's YouTube is by far the largest on the site, with nearly 4 billion views, nobody knows for sure whether a standalone music-video site can attract a big audience or ad revenue.

The question is whether Universal Music's content is attracting viewers to YouTube or whether visitors stumble on to the videos while they are already on YouTube. Either way, the companies say they are confident that the site won't have any trouble drawing fans.

"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, presumably referring to the traffic Universal sees at its YouTube channel." And this traffic represents the most sought after demographic for advertisers, especially as advertising dollars continue their shift from old media to new."

[zmonster]

Why is Eric Schmidt on Apple's board of directors? This is now the SECOND project he's started (first was Google Phone) that is directly competing with Apple. I think this guy is using the inside information at Apple to give Google competitive advantages. Something is rotten here.

[seven7dust]

to be fair google has helped Apple out as well

see the numerous projects google has directed at the iPhone
like maps,youtube,google books etc.
and this service will most probably work on iPhones too

Apple doesnt really care much about iTunes or software sales much ! the bulk of their Profit comes from hardware n e way !

but this partnership
is partly a problem considering Android is a big threat to Apple !
and so many of Androids features were cloned from the iPhone !
So I've always had a problem with him being a board member as well ! I Hope he doesn't steal much more !

[BOTNET]

"Apple doesnt really care much about iTunes"

you joking, right? iTunes Store is Apple's cash cow and the biggest music store in the US

[seven7dust]

iTunes is only entering the 1 billion revenue mark now

[Sam Papelbon]

'vevo'? seriously?

[dascha1]

Let me guess - one either has a law degree or technical degree. Probably safe to say, neither have a music degree.

[rocketjam--2008]

I think @demonbaby said it best at another site:

Wow guys, this is awesome! I've been looking for a new place to view music videos from all of my favorite UNIVERSAL MUSIC GROUP artists! It's exciting to me that I can finally be one hundred percent sure I'm sending revenue to the biggest, most out-of-touch dinosaur of a giant multi-national corporation when I watch music videos online! I'll even be helping the RIAA stay in business - those guys have been having some tough times lately, so they need our support! You know, sometimes I would find music videos on YouTube from my favorite UNIVERSAL MUSIC GROUP artists, but it appeared that they'd been uploaded ILLEGALLY by some fan trying to steal money from hard-working lawyers and executives! It made me feel dirty for watching videos that weren't provided to me officially by UNIVERSAL MUSIC GROUP - it felt like I was stealing! Thankfully all of that moral ambiguity will be gone now that VEVO is here! If history is any indication, all of my favorite UNIVERSAL MUSIC GROUP videos on VEVO will include all of the great features that I, the consumer, have come to expect from UNIVERSAL MUSIC GROUP, like LOTS of cool advertisements during the videos, and a special feature that makes sure I can't repost the video on anyone other websites - that would be stealing!! Golly everyone I'm SO PSYCHED for this cool new website!

[audioman7]

check out www.audiotube.com and discover the new model, the independent artists not the old scammers

[MichaelJohnNielsen]

@seven7dust

I agree that Google has helped Apple enormously. Take alook at the new ad's for iTunes during any major music video from UMG or SONG BMG. Think of the traffic Youtube will be driving to iTunes.

However I do believe Eric Schmidt should be removed from Apples board; it's almost to much of a conflict of interests.