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Big Music Mulls Digital Options

The big four record labels (Universal, Warner, EMI and Sony/BMG) are still scrambling to find a solution to rapid declines in CD sales and digital music growth. According to the Financial Times, plans under discussion include: a partnership with Hulu, the successful online television and film joint venture between News Corp. and NBC Universal; the creation of a premium service on YouTube; or a standalone venture, involving all or some of the big four.

Just last year, industry members had hailed deals struck with Google's YouTube as a new way to drive profits, but the Times points out that now, some are questioning whether either side has made much money from the deals at all. Under the existing arrangements, YouTube is required to share advertising revenues with the record labels in addition to paying a few tenths of a cent each time a music video is streamed. Universal, the biggest of the record labels, has said it makes "tens of millions of dollars" from the arrangement. Of course, Warner Music last week failed to agree to a new deal with YouTube, claiming it was not being adequately compensated.

In any event, the Times report claims that representatives of two unnamed music companies are now in talks with Hulu about a possible partnership. Said one source: "If it happens at all it will be with Hulu." Both music companies said that any deal to create a standalone music service would not replace existing deals with YouTube.

Read the whole story at Financial Times »

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