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Vivendi SAs Universal Music Group, Warner Music Group Corp., EMI Group Ltd. and Sony Music Entertainment are negotiating to add music videos to Hulu, said the people, who declined to be identified because talks are private.
Hulu, whose owners include NBC Universal and News Corp., plans to compete with Vevo.com, the music service announced by Universal Music and YouTube, the dominant video Web site. Sony, EMI and Warner Music are being asked to join Vevo.com, YouTube and Universal Music said on April 9.
Hulu will add more content this year than in 2008, Chief Executive Officer Jason Kilar said yesterday at a conference in San Francisco. He wasnt available to comment further, a Hulu spokeswoman said.
“We dont go into details about which companies were talking to, but were exploring deals with a number of companies,” London-based EMI said in an e-mailed statement.
Sony Music spokeswoman Claire von Schilling, Warner Music spokeswoman Amanda Collins and Universal Music spokeswoman Maria Ho-Burge declined to comment yesterday.
New York-based Warner Music, the only independent, publicly traded record company, climbed 10 cents to $4.70 yesterday in New York Stock Exchange composite trading. The shares have climbed 56 percent this year. Google, based in Mountain View, California, and up 25 percent this year, rose $2.39 to $383.86.
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Record labels are seeking to generate online ad revenue from music videos, once used as a marketing tool to spur album purchases. Record sales have skidded 45 percent in the U.S. since 2000.
All four record labels have been in discussions with Hulu since late last year, and the sides havent been able to agree how to split advertising revenue, two of the people said.
Hulu isnt offering music companies ownership in the Web site, those people said. Walt Disney Co. is in discussions to purchase a stake in Hulu alongside NBC Universal, a General Electric Co. unit, and News Corp.s Fox, two people with knowledge of the plans said on March 30.
Universal Music Chief Executive Officer Doug Morris and Google CEO Eric Schmidt may offer stakes in Vevo.com to Sony, EMI and Warner Music, one of the people said.
Hulu.com, whose owners include Providence Equity Partners, ranked fourth in February among U.S. online video sites, according to ComScore Inc. Fox sites including MySpace.com were second and Yahoo! Inc. properties were third. Online video watching expanded 10 percent last year, according to Nielsen Co.