Universal Music Pulls Videos From MTV Websites as Advertising Talks Fail

Vivendi SA’s Universal Music Group, the world’s largest record company, pulled its videos from Viacom Inc.’s MTV websites after talks failed on a new syndication agreement.

Vevo, the online video site co-owned by Universal, was negotiating to install its advertising-supported video player on the websites of Viacom’s MTV, VH1 and CMT cable channels, two people with knowledge of the situation said. The talks broke down over control of ads elsewhere on the sites, said the people, who asked not to be named because the talks are private.

The dispute highlights the growing influence of Vevo, created last year by New York-based Universal with Sony Music Entertainment and Abu Dhabi Media Co. The site, powered by Google Inc.’s YouTube, added EMI Group in December to gain content from three of the four biggest record companies. The service plans to syndicate the videos to other Internet sites.

“During our recent discussions with Vevo, we were unable to reach a fair and equitable agreement for rights to stream UMG artists’ music video content,” New York-based MTV Networks said today in a statement. “As a result, UMG has elected to pull their music videos from our websites.”

Universal’s agreement with the MTV sites expired in July, said one of the people. The dispute doesn’t affect access to video footage by MTV’s cable channels, the people said.

Vevo was developed under Doug Morris, the co-chief executive officer of Universal, which handles acts including Lady Gaga. He plans to the step down as co-CEO at the end of the year, while remaining chairman.

Vevo Users

The site, featuring material such as music videos, concert footage and interviews, allows record labels to attract premium- prices for ads while controlling how music is viewed and distributed online, Morris said in a December interview.

Since its December debut, Vevo has become the Web’s No. 1-rated music video provider with more than 49 million unique visitors a month and attracts tens of millions in advertising dollars, Universal said today. The site has reached agreements to provide music videos to companies including AOL Inc. and CBS Interactive.

“Our artists are enjoying tremendous exposure on Vevo on Youtube and Vevo.com, and will enjoy even more as Vevo continues to complete syndication deals,” Universal said.

Vivendi, which also owns a controlling interest in video- game publisher Activision Blizzard Inc., lost 41 cents to 18.26 euros today in Paris and has declined 12 percent this year.

Viacom, the New York-based media company controlled by Sumner Redstone, fell 10 cents to $33.60 in New York Stock Exchange composite trading and has gained 13 percent this year.

To contact the reporter on this story: Anthony Palazzo in Los Angeles at apalazzo@bloomberg.net

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