May 31 (Bloomberg) -- Warner Music International and digital services provider Premium TV agreed to develop online television sites that will let consumers watch music videos for free, as the music industry seeks to counter a decline in compact disc sales.

Revenue will be driven by advertising, pay-per-download and letting other online platforms integrate Warner Music's video programming into their sites. There are also plans to develop subscription-based and mobile versions of the platforms, the international division of New York-based Warner Music Group Corp. said in a statement.

Warner Music Group created a video unit and has made deals with Google Inc., including its YouTube unit, Brightcove Inc. and Joost Inc. to distribute music videos online as it tries to tap into new revenue streams. The company posted a wider second- quarter loss this month and said it will eliminate jobs as demand for CDs shrinks.

``The depth and breadth of experiences that this partnership should ultimately provide means we will connect not only with traditional music fans, but with a broader audience who consume music on a more casual, lifestyle orientated basis,'' Warner Music International Chairman and Chief Executive Officer Patrick Vien said in the statement.

Warner Music Group created a video unit earlier this month to promote new albums and artists on television, the Internet and mobile devices. The world's fourth-largest record company set up the division, called Den of Thieves, in Los Angeles. Den of Thieves will help drive the company's digital sales of music.

Features of the Warner Music International and Premium TV sites will include video programming that can be personalized, a ``send to a friend'' function and a video-on-demand service that can be streamed as well as downloaded, the music company said.

Premium TV

Premium TV, which generates revenue for sports, entertainment and publishing companies, will build each site and provide its proprietary searchable video archive technology, according to the statement. Closely held Premium TV, based in Feltham, England, will also oversee the commercial exploitation of the sites.

``To be working with a major music label and its complete music video archive is a great opportunity,'' Premium TV CEO Oliver Slipper said in the statement. ``It will also offer an enhanced commercial model, building on our existing expertise monetizing clients' rights, through the incorporation of targeted in-stream video advertising.''

Details about when the sites would start running weren't available.

To contact the reporter on this story: Aisha Phoenix in London at aphoenix@bloomberg.net.

Last Updated: May 31, 2007 05:46 EDT