In a new bid to find a better revenue stream, YouTube announced a new partnership with one of the biggest music company, Universal Music Group.

The two companies intend to launch a new music video site, called Vevo.com. While YouTube will handle all the technological aspects of the deal, Universal Music will be responsible to supply original, premium content for the website.

 

The launch is expected in the coming months and the companies will share advertising revenue generated by the site."Vevo will expand the premium video marketplace, generate new revenue streams for content creators, and provide brand advertisers an unprecedented opportunity to get in front of a highly engaged audience," said Doug Morris, UMG's chairman and CEO, in a statement.

 

Despite its huge traffic, YouTube is still looking to solutions to convert its audience into revenue. So far, the Google-owned video sharing sites has tried a lot of methods from introducing video ads to placing links to Amazon MP3 and iTunes, but nothing seems to works.

 

Earlier this month, CreditSuisse analyst Spencer Wang noted  that YouTube will lose $470 million this year. Wang says YouTube's revenue will jump 20 percent to $240 million, but that the increase will be offset by a staggering $710 million in costs.

 

On the other hand, YouTube is facing an increased pressure from music labels and medica companies to pay fees for the right to use their music and videos.

 

Also, this week, CNET News reported that YouTube and Sony Pictures might announce a new partnership, thanks to which full movies owned by Sony will be made available on the video site.

 

Hulu.com, a website owned by NBC, which features mainly premium content has proven to be more successful in terms of advertising dollars than YouTube. That’s why attracting premium content is the new direction for YouTube.

 

Also, Universal Music and YouTube announced that they have renewed their existing licensing agreement. YouTube will continue to be licensed to allow visitors to use songs from Universal Music.