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Summary:

YouTube has proven to be a powerful promotional vehicle and revenue generator for Universal Music Group, as it serves to connect the music l…

YouTube has proven to be a powerful promotional vehicle and revenue generator for Universal Music Group, as it serves to connect the music label to over 400,000 channel subscribers who watch its ad-supported clips. That popularity has inspired UMG execs to explore the creating a “Hulu for music” standalone site, BillboardBiz reported, citing unidentified sources. The proposed site would offer programming beyond just music videos, which is primarily what UMG has on its YouTube channel. Executives want to bring in other record labels as well. UMG is apparently looking for a “major media company” to oversee the site. The creation of the site would not necessarily cancel out operation of UMG’s YouTube channel. The agreement between UMG and the Google-owned video site ends this year. Overall, UMG has streamed about 2.6 billion videos, more than anyone else.

SAI: UMG expects its videos to bring in $100 million, mostly from digital. And since the lion’s share of its online video is seen on YouTube, that appears to be a fairly profitable relationship. But gratitude only goes so far, and UMG may be betting that it could do even better by going it alone — and not having to share the revenues with YouTube.

Rafat adds: Isn’t that what MySpace Music was supposed to be, both audio and music videos? And UMG is an investor/partner in it as well…

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  1. They tried this already, unsuccessfully, with their International Music Feed venture.

    I guess they didn't learn from the first one. Maybe they are looking at this as something to make use of their MOG investment.

  2. They also tried this years ago as Jimmy & Doug's Farm Club. Tried it in the sense of creating a destination and expecting consumers to abandon existing behavior (at the time, watching MTV) to seek content on a dedicated channel. This will only work if Universal does not renew licenses w YouTube — not likely, given the site's obscenely large traffic. Better, imo, to bring the videos to where consumers already are. If Universal wants to better monetize these views, and share less revenue with YouTube, why don't they develop a proprietary player that can be imbedded at YouTube (as well as Facebook, MySpace, etc) and control pre-roll, player "skin" etc?

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