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Wednesday, April 20, 2005
AOL Makes Deal with Universal, Warner

The unshared agreements with Universal and Warner music groups will give AOL users on-demand access to thousands of music videos.

With video catalogs from Universal and Warner, AOL will be able to create several different music video channels. It will also integrate the videos with already existing AOL offerings such as its in-studio performance content, AOL Music Sessions and concert footage, called AOL Music Live.

The deals with Universal and Warner are just the first to be announced, said company spokesperson Ann Burkart. AOL is in talks with a number of record companies to broaden its video portfolio.

AOL has already begun encoding videos, which will be available to both members and non-members free of charge on the company's site, according to news reports. Although the content will be free for users, AOL will be paying to use the video libraries.

The agreement comes just a few months after Universal asked for higher remuneration from online services in exchange for the use of music videos. Universal is also reportedly in talks with Yahoo to ink a similar deal, asking for better financial terms for the content shown on Yahoo's video service.

In early April, AOL announced that it would bring VoIP to the masses with a simplified Internet phone service that will eventually be rolled out to the general public after AOL members.

Unlike that initiative, however, the music videos will be made available to non-members immediately, and some are already on AOL's site.

The AOL deal will last for two years and incur a charge of less than a penny per view of videos, or a percentage of advertising revenue - whichever is greater.

In the same fielf, MTV is preparing its own online music video venture dubbed "Overdrive." Overdrive will feature news, music, television, movies, and "The Lineup" featuring highlights of all channels and a continuous MTV news ticker. MTV is currently building a new studio in Times Square to develop exclusive content for MTV Overdrive.

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