Google and Universal Music in talks to launch YouTube music channel

Google and Universal Music are understood to be in talks to launch a premium online music offering on YouTube.

Reports claim that the deal would see YouTube power a site professional video content from Universal Music artists such as U2.

It is predicted that advertisers will be charged a higher rate for ads on the new site – code-named Vevo – than they currently pay for placements on YouTube.

Additional revenues could also be generated by selling gig tickets and merchandising through the site.

This would follow the success of US video-on-demand site Hulu, a joint venture between NBC Universal and News Corp.

Recent figures from Hitwise show that YouTube was the second most searched for brand in the UK during the 12 weeks ending 3 January 2009 (see Facebook is UK’s most searched for brand).

YouTube was bought by Google for $1.65 billion in 2006 (see Google Buys YouTube).