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Yahoo inks licensing deal with Sony BMG music

20 November 2007 9:31 by Rich "vurbal" Fiscus | 1 comment

Under a licensing deal announced Today, Yahoo will be allowed to enable users of their services to include recordings owned by Sony BMG Music Entertainment in their own original content. In exchange, Sony BMG will be receiving a cut of ad revenue from the clips.

With the success of viral video sites like YouTube and social networking portals like MySpace and Facebook, content owners are scrambling to find ways they can collect royalties for user generated content. There are two basic approaches in play right now. Some current deals are similar to this one, with content owners taking a relatively hands-off approach to exactly what content will be provided to consumers. Others involve content owners licensing limited media clips which consumers can use for free, and then offering extra services like sending them to someone's mobile phone, for a small fee.

Perhaps due to the many markets Sony competes in, they haven't been very successful at leveraging their content for internet distribution. Even the PS3, which the company has always seen as a home entertainment platform, lags behind competition from Microsoft. While Xbox Live has been able to both sell and rent content to a growing number of console owners, Sony so far hasn't managed to leverage the vast amount of content they own to create a revenue stream for console customers.

The Yahoo deal is similar to one reached with Google last year, which covers both Google Video YouTube.

Source: Associated Press

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