AOL Strikes Deal For Music Videos

As part of America Online's broad effort to attract Web traffic and advertisers, the company said Tuesday it reached a licensing agreement with Universal Music Group and Warner Music Group to harness their music video libraries. The deal comes over two months after Universal Music publicly demanded that companies like Time Warner's AOL contract new financial agreements for the use of its content.

AOL has already started encoding the thousands of videos that it is making available at www.aolmusic.com where members have unlimited, on-demand access to them. AOL agreed to pay either a fee for each video viewing the music groups or a share of the advertising revenue its receives. No further details of the deal were released.

Bill Wilson, senior vice president of programming at America Online, said AOL's appetite for video content to support video advertising is what's driving these deals, adding that AOL Music is in talks with additional labels. "We thought there was a need to increase inventory to move our video advertising that's selling so briskly," Wilson said.

The content will be integrated with AOL's existing music videos offering, much of which will be repurposed into video channels based on artist and genre. The video channels will include advertising in different forms, most commonly banners and in-stream messages. Universal artists include superstars like 50 Cent, Eminem, Mariah Carey, Shania Twain and U2.

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