Viacom and NBC Take Note: Universal Music (and Others) are Making Tens of Million$ on YouTube

Instead of suing or shunning YouTube, Universal Music, the largest recording company in the U.S., is making tens of millions of dollars from music videos, according to CNET. They have a revenue-sharing agreement with YouTube for the ads the online video network has increasingly been displaying.

And it’s working.

Universal’s YouTube channel is the most-watched channel in YouTube history at 3 billion views, with artists like U2 and the Black Eyed Peas. In second place is Sony BMG, incidentally the second largest recording company, with 485 million views.

Next year, Universal is projected to make $100 million from online video streaming across several sites, including YouTube, MySpace, and MTV. The MTV one is ironic, since Universal claims they never made money via MTV (on TV) when the network actually played videos. Of course, the ROI isn’t direct, so that’s why MTV doesn’t get the credit for its obvious place in music video history. But now, MTV’s online site is helping to keep videos alive, with a more direct link to profits.

Big media companies such as Viacom, who is suing YouTube/Google, and NBC, which launched its own video streaming site, Hulu, earlier this year should take note: If you can’t beat ’em, join ’em.

Many experts have said that Viacom has no case, just an ill informed judge. That sentiment was backed up by a similar case against online video site Veoh, which was thrown out by a different judge in August.

Meanwhile, NBC’s Hulu only saw 9 million unique viewers in November, compared to YouTube’s 82 million. Hulu, of course, primarily streams what has already been on TV, not user-generated content. Still, I’m guessing if NBC had a Universal-like agreement with YouTube, they’d be making more dough.

Call me crazy, but I think the 500 workers getting the axe from NBC Universal would have appreciated a more open mind when it comes to these things.

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