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Google And Universal Music Close To Signing Deal

Ottawa - In an alliance that would reshape how music and music videos are distributed, Google Inc. and Universal Music Group are close to creating a new partnership. The Wall Street Journal has reported that Universal would like to use YouTube’s technology, now owned by Google, to power a hub that would distribute its content across the internet.

Universal would distribute its many music videos through Google under a service tentatively titled “Vivo.” The service would be paid for by revenue generated by higher-priced ads surrounding the music video player.

If “Vivo” goes ahead, it would become a rival to a similar service being proposed by MySpace and four other music distributors: Sony Music Entertainment Group, Warner, EMI Group, and also Universal. This service, called “MySpace Music,” allows users to stream music without direct fees, with ad revenue being shared between MySpace and the music labels.

This may be a promising new direction for music labels that have struggled with the development of new business models in the digital and internet age.