YouTube and Universal Music Group are in advanced talks to create a new music video platform tentatively called Vivo, The Wall Street Journal reports. The new hub would allow YouTube to sell more, higher-priced ads and better showcase Universal’s videos on and off of the site, helping both companies earn more money.
Tension between the record labels and YouTube has grown in recent months over ad revenues from videos on the site.
The deal goes beyond YouTube’s existing licensing arrangements with three of the four major record labels, Universal, EMI and Sony Music, which just re-upped. In fact, it seems more like the “Hulu for music videos” project long-rumoured to be in the works.
Universal and YouTube’s potential agreement is still weeks away from being finalised and could still fall apart, those familiar with the matter tell The Journal. It is unknown whether YouTube is exploring a similar arrangement with other music companies.
This news comes as Google (GOOG) CEO Eric Schmidt discussed the ongoing battle to compensate record labels for promotional content, like music videos, at an investor conference this week.
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