Content deals with SBS and UMG widens reach YouTube
YouTube is still one of the purchases Google made which are a success when you look at the number of visitors, but not a success when you look at the financial balance. There still is not very much revenue coming from the video-website.
Google is trying to change that by making several changes to the system and adding ads to different places (six months ago they launched Interest based Advertising) and now they have also started to join forces with content providers. With the Universal Music Group they want to make more out of music, while in Holland they made a deal with broadcaster SBS to put tav content online.
The deal with the Universal Music Group (UMG) is a licensing and advertising-revenue-sharing agreement. The deal covers the use of UMG-music on YouTube and also a joined effort in setting up a new special site, Vevo.
Vevo will be launched later this year and is supposed to become the "Hulu for music". At the start there will only be UMG music placed on Vevo, but eventually other labels will be 'allowed' on also. The economics of the new deal will be based on sharing ad revenue.
Meanwhile in the Netherlands YouTube is looking at the television for content. They struck a deal with broadcaster SBS. Popular content from SBS' channels Net5, SBS6 and Veronica will become available on YouTube.
The deal off course makes it possible for both SBS and YouTube to place ads around the content. SBS will also be able to set up different specialized channels so they can put up specific content, made especially for these channels.
Both deals can be seen in the light of YouTube trying to make money and trying to expand their focus by becoming more and more an online video platform for all kinds of videos, not just user based. Compared to 'competitors' like Hulu YouTube does have some advantages. Not only the large user base but also the bigger audience world wide, since Hulu can only be viewed in the US.