YouTube and Universal Close to Striking Deal

Jacksonville – There is talk about the joining of Universal Music Group and Google Inc to create a new music video hub that would be operated by YouTube. This discussion started last year and is now in late negotiations. If the companies agree, the list of musicians will be part of a new YouTube area provisionally be called Vevo. This will give YouTube and Universal a chance to make more money from videos.

YouTube has been a popular site for a long time to watch music videos, but many seen are not given out officially or licensed by the artists and labels. Universal and Google are discussing a licensing deal that will hopefully change that.

With the partnership of the two companies, Universal would use YouTube technology and the sales of ads to spread content around the Web. This will also address royalty concerns where music labels argue they are not being compensated for music videos.

The last situation between two companies was in December 2008 when Warner Music Group and YouTube tried to renegotiate a video distribution deal. Today, the agreement between Universal and YouTube is not complete but both companies need something to work so they can increase their revenue.