Business news source Bloomberg reports that, according to sources “with knowledge of the discussions,” streaming video powerhouse Hulu.com, is in talks with record labels to offer music videos on the site. Major music companies Universal Music Group, Warner Music Group, Sony Music Entertainment and EMI Group are rumored to be in discussion with the video site.
Hulu, currently best known as a host for offering full episode television shows, could provide fierce competition with Google Inc.’s YouTube for audience attention to music video. YouTube and Universal Music Group are in the process of jointly developing and launching a new music service called Vevo.com, and are asking the other “big three” record companies to join them.
None of the companies involved in either the Hulu/record company or YouTube/Vevo/record company ventures are commenting on the rumored discussions. Sticking points that are (supposedly) bogging down discussions at Hulu include music co ownership stakes in the site (reportedly not gonna happen) and how to divvy up any advertising revenue generated by music video hosted by the site.
As with other traditional media, the music industry is struggling to redefine itself and its business model to take greater advantage of the shift of attention (and advertising and revenue) to online media. Internet advertising revenues reached a record $23 billion last year, as consumers’ music consumption moves from terrestrial radio and television toward online venues. It makes sense for the big record labels to partner with leading video sites to bring their library of music videos to the attention of the music-buying Internet audience.
We’ll certainly keep you posted as the music video story develops.
