• Bloomberg News, Thursday, April 23, 2009 11:45 AM

Bloomberg reports that Hulu.com, the joint music venture from News Corp. and NBC Universal, is in talks with the major record labels about launching music video service that would rival Google's YouTube, citing four people with knowledge of the situation. The major record labels are EMI Group, Warner Music Group, Sony Music Entertainment and Universal Music Group, which is also partnering with YouTube on its music video venture, Vevo.com. Earlier this month, Universal and YouTube said that Sony, EMI and Warner have all been asked to join their service, too.

With regard to the Hulu music video venture, all parties declined to comment. Hulu.com is ranked fourth among U.S. online video sites, according to comScore; YouTube is first (by a long, long way), followed by Fox Interactive Media and Yahoo.

Record labels are now seeking to generate online ad revenue from music videos, which used to be a marketing ploy to spur album sales. As Bloomberg notes, record sales have dropped 45% in the U.S. since 2000. According to two of the four unnamed sources, all four labels have been in discussions with Hulu throughout the year, but the sides haven't been able to agree on how to split advertising revenues. Hulu isn't offering music companies an equity stake in the Web site, the sources said; one noted that Universal and Google may offer the labels stakes in Vevo.com.

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