Universal may start charging for music videos on TV & Online
Posted on 04/02/05 00:34 by Seán Byrne                             
Universal may start charging for music videos on TV & Online

Up until now, record labels have treated music videos as a free method of promoting its music.  As a result, websites, cable and satellite TV operators have been providing music video stations free of charge or at least included as part of their basic package.  MTV was given virtually free access to music videos from the early 80's which helped promote the label's music.  At present, some on-demand online music video websites such as from AOL are doing so well that they are probably as important as promoting music on the radio.

Unfortunately, Universal Music Group is changing its policy to now charge for the broadcasting of its music videos, which means that it will collect royalties from websites and cable and satellite operators for the playback of its music videos and live artist performances.  The only exceptions to this policy include Artist Web sites, music video clips no longer than 30 seconds and certain consumer brand sites involved in one-time deals.  So far Microsoft has agreed to pay Universal to make use of its videos.

In an aim to get music video providers to sign up, Universal is planning to stop purchasing advertising on any website that will not make a deal under its new policy.  Other record labels also plan on making a similar move.  GristyMcFisty submitted the following news via our  news submit:

After years of reluctantly treating music videos as free promotional tools, record label Universal Music Group is planning to charge Internet and satellite companies whenever they play.

The change, which is likely to be followed by other record labels, marks a potentially substantial shift in the economics of the online-entertainment world. Some of the most popular entertainment services, such as Yahoo's Launch and the AOL Music service, are built around streaming millions of free videos a month to customers.

Label executives have long bemoaned their initial precedent-setting decision to provide MTV with virtually free access to music videos in the early 1980s. Universal's decision marks an attempt to ensure that the label profits from an on-demand medium that is quickly becoming the modern version of MTV.

Read the full article here.

It would be a pity if the major record labels all decided to start charging royalties when ever their music is played back on TV.  This may spark the end of free music video websites or at least start charging a fee to watch music videos from any of the major labels that take on this policy. 

Quite a lot of music these days is getting quite biased on their music videos, which means that while the song may sound horrible on the radio, it would go well with the music video, for example 'The Joker' by Fatboy Slim.  If many consumers do indeed purchase music because they watched the video, this move could be a bad mistake for Universal and any other label that follows its policy.

If the music video royalties charged by record labels are quite steep, it may be the end of free-to-air music video channels on cable and satellite TV and some channels may be forced to become part of a premium package, like how one must pay an additional fee for premium movie channels.  A few examples of free to air music video channels in the UK include Chart Show TV and the Vault (80's & 90's).  The likely survivors would be those which make profit from where its viewers vote for their song through a premium rate number.

GristyMcFisty added:  I can just hear Gordon Geckos voice now "...greed is good..."

Source: C|net News - Music

Reactions
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By Olli, Fri 4 Feb 2005 02:46
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OlliI can't believe anybody is willing to pay for music adverts.
By CPUSlayer, Fri 4 Feb 2005 03:05
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Please do, and watch their income decrease. Advertisement is the best way of getting people to buy anything! Look what they charged per second of advertising durning the superbowl in past years. The less forms of advertisement they have the less people will know certant bands exsest. I bet their next move is to charge you to listen to the radio, that will be the time I quit listening to music.puke
By psychoace, Fri 4 Feb 2005 04:28
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you have heard of satallite radio right cpuslayer?
By rla, Fri 4 Feb 2005 05:50
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I love it. Is this not poetic justice? For decades broadcast corporations have been in bed with the major labels. They have shunned independent artists, refused to give airplay to those not aligned with the major record labels and have licked the boots of their bedfellows. Now Clear Channel and all you big boys who have sucked up to the majors all these years; How does it feel to taste the hair of the dog? I am loving this. I can't wait until some GexX genius comes up with the idea of headlining independent artists and labels on major portals and broadcast outlets. Gosh what a novel idea.
[edited by rla on 04.02.2005 05:51]
By Zod, Fri 4 Feb 2005 06:42
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Zodwe don't technically have to pay for the radio, but the radio stations do have to pay royalties for what they air don't they? They just use the advertising revenue to pay for it? Satellite Radio you have to pay for, but at least theres no commercial (or less commercials). I guess stations like VH1 would just have to start paying the royalties. I think music videos are kinda loosing their steam these days anyways. Maybe the royalties would just be the nail in the coffin.
By Ranmacanada, Fri 4 Feb 2005 08:01
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So first they cripple our cd's now they want to charge for royalties for promoting their own wares. How freaking long till they start charging royalties for every person that sings Happy Birthday, or even for those damn annoying songs that get stuck inyour head. This is ridiculous, but of course it comes from the American way, if we aren't making enough money, then let's rape the people cause they are morons and will do whatever we tell em.
By jazzstorage, Fri 4 Feb 2005 11:51
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IMHO this is great news!!!! Contemporary music videos have little to do with music and much to do with brand marketing… both the 'brand' of the artist themselves and more directly the large corporate brands via unsubtle product placement within them (*feel* Coke Cola, JVC, Motorolla etc pain if the distribution of these videos is impacted supergrin ). The marketing techniques used in these videos are mainly crude sexual imagery: whenever I'm stupid enough to flip to MTV all I usually see is a string of gyrating, semi-naked nymphets promoting the 'religion' of consumption (what music?). Don't get me wrong, sexual imagery can be great, but not when it's just used for selling things! Maybe these greedy b*st*rds charging for their own advertisements will curtail somewhat the current bombardment the public gets promoting a few mediocre musical talents, and will consequently allow some interesting music to make it through into the mainstream? We can hope!
By sikoone, Fri 4 Feb 2005 13:15
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MTV? There is no MTV anymore, it died long time ago. Now it's just a bunch of melodramatic, whiny reality dramas. When there is a music video all it is now is; a bunch of young, look at me i'm pretty but don't have any talent, please buy my music because i'm shaking my butt and showing you some cleavage 'artists'. Don't get me wrong just like jazzstorage, i like a little t&a but not when it's used to try to sell me something. That's an insult to my intelligence. Here's some half-naked women (or men if you're a woman) please buy my sludge. What will probably happen now is, now that MTV has to pay for videos the smaller artist will become less known because they won't want to pay for him. If you rely only on videos to buy your music, you're doomed to buy whatever they tell you to. It does make me worry about what will happen to small video shows like JBTV which airs here in my city. What they may do is now that they have to pay for these videos , they will show them. Hm, is that a good thing or bad thing?Smilie
[edited by sikoone on 04.02.2005 13:18]
By wizzcat, Fri 4 Feb 2005 13:46
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I hardly ever watch music-videos anyway, so I really couldn't care less. The artists who really push vids are usually the crappy ones anyway, so if they'll be losing out on $$ it's all good by me.
By nyarrgh, Fri 4 Feb 2005 16:15
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These companies really are trying to shoot themselves in the foot lately aren't they? not content with trying to alienate their consumers and all the negative publicity due to their "legal" actions, now they want to charge for their own ads.
By agomes, Fri 4 Feb 2005 20:43
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Ah!Ah!Ah!!!! No one can stop them...they are after any cent they can get...now they want to get revenue from their own marketing video clips, even if don't know anymore what to put into as content, just to be different video clips tend to be real crap. Let's go...they charge, you don't pay... ...You don't pay, you don't see the advertisement, ... You don't buy the record/video...just fine!!! They lost their minds and got a cash machine as a replacement... devilloveitsupergrin
By Frogfart, Sat 5 Feb 2005 00:09
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Its great when you get to your mid 40's and start to have a little say in what you buy and what you don't. The big companies see you as a Cash Cow and ready for milking as you are starting to become a little more solvent and ready to spend a little more money on consumer products without having to borrow money. Tell them to F...k OFF and see how they get on without our money, I DO IT AND IT FEELS GOOD! Ps. never give the stores your zip code or other personal details at the checkout, but offer to sell it ot them. Also terminate your digital subscribtions and shop around. (It messes their sales people up)puh

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