Universal Music Group and DIVA Systems Corporation, which provides video-on-demand to the cable TV industry, today announced that they will jointly develop and deliver a new on-demand system for music videos based on UMG’s broadband music video website The Viewing Lounge.

The new service, also to be called The Viewing Lounge, will allow digital cable subscribers to navigate a catalog of music videos and choose what they want to see.

According to the UMG/DIVA announcement, users will be able to upgrade to a subscription service that will allow them to build custom video playlists.

"Since most people are already paying through the nose for cable and are totally numb to the oligopolistic tendencies of the major operators, do you think they’ll even notice a few extra bucks tacked on there for extra ‘functionality’? I don’t think so," opined one anonymous onlooker with no knowledge of the deal. "Nor are they likely to notice the way cable satellites try to monitor my thoughts. Thank goodness for this tin-foil helmet."

"Based on The Viewing Lounge’s popularity in the broadband space, and our current viewers’ interest in upgrading to a Video-On-Demand service, it was a natural fit to collaborate with DIVA, as their technology is already deployed with key cable operators and can enable advanced features such as targeted advertising, user-defined playlists, and subscription services," said Universal eLabs SR. VP of Market Development Lisa Farris. "TVL running on the DIVA platform provices users the ability to watch the music videos they want, when they want. And as you know, that means mad spins for videos featuring scantily clad, gyrating booty."

While VOD is still very much in its infancy, DIVA, which has more experience with targeted advertising and ad insertion than VOD services, is seen as a more-than-capable player from a technology standpoint, according to one insider. DIVA has already struck VOD deals with cable programmers, including Starz-Encore.

For its part, UMG has previously worked with sister company Canal Plus on developing on-demand systems.

"DIVA’s vision has always been that Video-On-Demand is much more than just movies," noted DIVA VP of Programming and Marketing Bev Doughty. "Universal adds a new content category for VOD, and the combined strengths of Universal and DIVA will provide a compelling product for the cable operator and the viewer. And if it actually works, it’ll make us all buttloads and buttloads of money."