The report comes from CNET News, who learnt from sources close to the deal that Vevo would be a destination closely linked to YouTube. The terms of the agreement are yet to be established, the sources said, and it will probably take several more weeks before the deal is signed.

 

CNET News also reported last fall that Universal Music was planning a site similar to Hulu, so this deal doesn’t come much as a surprise.

 

There was no official confirmation from YouTube that discussions with Universal Music are taking place, however, the magnitude of such an agreement is undeniable. First and foremost, YouTube is popular like a music distributor would only dream of, and Universal Music is…well, Universal Music. The two coming together is a new music video destination on the Internet is bound to have success.

 

We all remember that YouTube has had a lot of trouble in the past. In March 2007, Viacom and associates filed a lawsuit against YouTube, and its owner Google, for “massive intentional” copyright infringement of Viacom’s entertainment properties. Furthermore, in a lawsuit re-filed one year later, Viacom accused Google of deliberately supporting copyright infringement and not putting enough resources into finding ways of stopping it.

 

The $1 billion lawsuit went beyond court’s limits the moment the risk of compromising the privacy of millions of YouTube users became real. Many feared the situation could have lead to another AOL fiasco (two years ago, The New York Times correctly identified an AOL user), proving that privacy concerns were well-founded.

 

In early July last year, a federal judge ruled in favor of Viacom, granting it access to YouTube user records in order to prove their case against Google and YouTube. The records contain usernames, IP addresses and viewing history, but the judge dismissed Google’s claims that turning them over would break user privacy.

 

Following the judge’s ruling in the Viacom-YouTube case, the Electronic Frontier Foundation drew attention to the fact that the order violated the Video Privacy Protection Act and the First Amendment right of YouTube users to receive information anonymously.

 

But this time, a deal with Universal Music, and hopefully other music companies as well, will not only make things right for everyone, but will also bring very nice revenue for the music companies. Sony Music Entertainment, Warner Music Group, and EMI have also been approached in connection with the service, the same source also reported.