Financial News

Vevo, the planned online music video service announced by Universal Music and YouTube in April, is seeking outside investment from advertisers after signing up its second large record label on Wednesday.

Sony Music Entertainment, the second largest of the four major recorded music groups, announced that it would join Vevo, highlighting the proposed site's "attractive, clean and intuitive environment that appeals to fans and advertisers alike".

Sony (Munich: 853687 - news) will take an undisclosed equity stake alongside Vivendi (Paris: FR0000127771 - news) -owned Universal in the joint venture, which will pay Google (NASDAQ: GOOG - news) 's YouTube video sharing site for services including helping to build the technological platform on which it will run. Vevo is expected to launch this autumn.

A statement from Universal and Sony said the partners were also "exploring additional strategic participation by third-party investors to join this innovative entertainment platform as equity partners".

According to one person familiar with the discussions, it has already seen interest from brand owners which may be interested in taking an equity stake as well as placing advertising on Vevo, which will comprise a destination website and a player to be used on other sites.

Warner Music and EMI (LSE: EMI.L - news) have yet to commit to Vevo and, like other label owners, are exploring alternatives including a possible partnership with Hulu, the television and film site owned by NBC Universal, News Corp, Walt Disney and Providence Equity Partners.

The industry sees Vevo and Hulu as premium alternatives to the often low-quality video content currently available online, where they have made little or no revenue in the face of a deluge of unauthorised copies of their artists' videos.