• by Mark Walsh  @markfwal, November 21, 2007

Yahoo has signed a broad new licensing agreement with Sony BMG that allows consumers to add music and video content from the label and its artists to user-generated creations.

The deal expands the catalog of music videos on Yahoo Music from Sony BMG, whose artists include Alicia Keys, Daughtry, Bruce Springsteen and Jennifer Lopez. It also allows the distribution of videos through a media player that users can access on other Yahoo properties and embed on third-party sites.

Terms of the deal were not disclosed, but they include a revenue-sharing agreement between Yahoo and Sony BMG on video advertising.

The agreement marks the first time Yahoo has licensed content from a major record label in connection with user-generated videos. Sony BMG signed a similar licensing deal with Google last year, and struck another last month with social networking site MySpace.

Under that deal, Sony will license music videos, select audio material and other content from its artist roster, and will make the content available on its artists' MySpace profile pages. The moves reflect a growing willingness by music companies to make their assets available online with fewer restrictions.

A new report released by JupiterResearch on Tuesday says that while digital sales will make up one-third of the music market by 2012, the growth online won't offset the drop in CD sales.

Piracy has been a chief concern of record labels and other traditional media companies heading online. Last month, a group of major media and Internet companies including Disney, NBC Universal, MySpace and Veto announced a set of guidelines calling for the use of filtering technologies and other steps to block the unauthorized use of copyrighted material in user-generated content online.

Yahoo is not part of the coalition, but plans to introduce its own monitoring and filtering system for unauthorized content next year.