AOL Takes On MTV With Music Videos

Although Winamp fell by the wayside late last year, AOL Music is continuing full steam ahead with a number of initiatives designed to bring in a broader audience of consumers. Last week, AOL announced a deal with XM Satellite Radio and now the company is planning to take on Yahoo's Launch and MTV with online music videos.

AOL announced on Tuesday plans to roll out its own music video service in the coming months. The company has stuck deals with two record labels thus far for rights to stream their video libraries: Warner Music Group and Universal Music Group.

AOL plans to create artist and genre-based music video channels from the videos that it will have in its catalog.

"We expect to have access to videos in the tens of thousands from their catalogs -- as they clear more and we continue to add them -- that will enable us to offer more in our on demand archive and do more with programming," an AOL spokesperson told BetaNews.

Two months ago, Universal demanded that online services must either pay for the rights to stream their artists' videos, or remove them from the Web. AOL and Yahoo removed all Universal videos, but today's deal means they will be added back into the AOL Music catalog.

The AOL deal will last for two years and incur a charge of less than a penny per view of videos, or a percentage of advertising revenue - whichever is greater. According to news reports, a similar deal is also close to being signed with Yahoo.

MTV is preparing its own online music video venture dubbed "Overdrive." Overdrive will feature news, music, television, movies, and "The Lineup" featuring highlights of all channels and a continuous MTV news ticker. MTV is currently building a new studio in Times Square to develop exclusive content for MTV Overdrive.

AOL's music video service will be available to non-members, following its new strategy of opening its "walled garden" to Web consumers. AOL also said its videos will work on Mac OS X, unlike Yahoo's Launch offering. Individual songs and radio do not currently work on the Mac, but AOL says it is working on adding compatibility.

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