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UNIVERSAL MUSIC GROUP VIDEOS OFFLINE FOR SOME

Bid to Monetize Music Video Streaming Continues as One-Month Deadline Passes and Some Services Pull UMG-Owned Clips
Want to see the new 50 Cent Video, now? Better head to Music.MSN.com, because you won’t find it on Yahoo! Music or AOL Music.

As of yesterday, the deadline passed for Universal Music Group’s month-long ultimatum to providers of on-demand music videos: Either agree to a new deal to pay for streaming UMG’s content or take it off your sevice.

According to insiders, MSN has led the way in striking a new deal with UMG, agreeing to pay a set fee per stream (thought by some to be as much as a penny a go), plus a percentage of ad revenue.

But both Yahoo! and AOL have removed UMG-owned clips from their services. AOL has removed all UMG videos, while Yahoo! has taken down only current releases—the company reportedly having an existing deal in place for catalog that is apparently still in effect.

Despite the removal of UMG videos from these services and others, insiders insist that the situation isn’t a stalemate. Rather, negotiations are ongoing and the services are merely complying with UMG’s wishes after the one-month deadline.

Streaming music videos has become a big business, with some 8 billion clips streamed last year and ad dollars piling up. With the exception of MSN, sources say, the process of working out deals with providers that cut UMG in on the action is taking longer than expected because it’s a new arrangement that has to be hammered out from scratch. Then again, some believe providers may have wanted to demonstrate their willingness to do without UMG product in order to use it as a lever in negotiations.

While making often-astronomically-expensive music videos a source of revenue has been talked about for years, the current UMG bid initiated by Chairman/CEO Doug Morris is thought to be the first to make it happen. With MSN the first to come in, UMG has already run a series of exclusive promotions with the Microsoft service and has others in the wings.

In addition to the online providers, UMG is also negotiating with satellite (DirecTV’s Music Choice) and cable (Comcast’s video-on-demand service, still in development). Sources say more deals should be completed soon.
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