Finally Gets Major-Label Buy-In For Music Vids, UMG Signs On

Thirteen months after it announced its intention to create an MTV-beating service to offer the “long tail” of music videos, has struck its first major-label partnership for the project. The site first announced a better-than-YouTube video initiative in May 2007, launching with clips from indies like Ninja Tune, Nettwerk, Domino, Warp, Atlantic and Mute. But progress on other labels has been slow, relying on pulling in ropey YouTube vids using tag feeds.

Now it’s got licensed by Universal Music Group (UMG), however, can include “official” videos in its own Flash player from artists like Amy Winehouse. And it can use the “scrobbling” technology it added to the player to let users log watched videos and receive video recommendations – just like the Audioscrobbler. In the release, Universal’s digital SVP Rob Wells said artists would get revenue from every video played (obviously). But artists, labels and copyright holders will also get a rev slice from ads displayed next to the videos. now faces three related challenges…

— 1. None of this makes up for the loss of Warner Music Group’s music catalogue, because audio trumps video. It must negotiate hard to win them back.
— 2. It must leverage the Universal video deal to win better support from other labels for the video initiative (it’s already planning to showcase UMG videos over the next month)
— 3. It must apply what’s learned in negotiating for music videos to securing rights to scrobble TV content, a longer-term development that’s been promised in light of the CBS (NYSE: CBS) acquisition.