AOL MAKES VIDEO DEALS WITH
UMG, WMG

America Online today announced that it has reached agreements with both Universal Music Group (as reported yesterday in Rumor Mill) and Warner Music Group to stream UMG- and WMG-owned videos through its Web-based AOL Music on-demand service.

AOL Music (www.aolmusic.com), which reaches 22 million viewers a month according to Media Metrix, will now add thousands of UMG and WMG videos to its on-demand library of videos and original content including in-studion Sessions at AOL segments and the AOL Music LIVE! concert series.

Many of the UMG and WMG videos are already available online for streaming on an unlimited basis. In addtion, AOL says it will create artist- and genre-based music video channels featuring the new (and newly restored) content.

AOL removed all UMG-owned content at the beginning of March, after a deadline set by UMG passed and negotiations continued without a deal.

In the case of UMG, terms of the new deal are said to involve either a set fee per play of each UMG video, or a percentage of ad revenue generated by AOL’s video-on-demand service. Terms of the WMG deal are unknown.

With over a billion videos streamed each year over AOL alone, video-on-demand is big business, and music groups, who are said to feel they made a mistake in largely giving away often hugely expensive video content to MTV for nominal fees, have been working to cut themselves in, with UMG leading the way.

"What happened with MTV is that we got a certain amount of money each year but it wasn't attached to growth at MTV," UMG chief Doug Morris told the New York Post. "I really think this is a milestone."