Google Inc. (NASDAQ:GOOG) subsidiary YouTube and Universal Music Group are planning to launch a music video website together in order to increase both of their revenues.  The Universal Music channel on YouTube is already one of the most subscribed to on the video website.  The combined website will be called Vevo.

This deal is a major boost for YouTube because the video website is getting pressured to find additional revenue streams and is taking a lot of flack for not being able to pay fees for the rights to use their music and music videos.

Vevo will be wholly owned by Universal and it will feature higher quality videos than what is seen on YouTube itself. “The rationale is to help make Vevo a place that brands feel more comfortable,” stated Rio Caraeff, EVP of Universal’s eLabs division.

Universal hopes that Vevo will be comparable to Hulu.  Vevo will syndicate videos through their platform called Vevo Music Network.  Universal is planning to partner with EMI and Sony Music Group who have already renewed their contracts with YouTube.  Partnering with Warner Music Group will be slightly more challenging because they have not been able to make a deal with YouTube in the past.

The EMI Group is a music company that is owned by Terra Firma Capital Partners.  Terra purchased EMI for £3.2 billion around August 2007.  EMI recently signed with MySpace Music to have their music distributed through the social network.  EMI used to represent Paul McCartney, Radiohead, and The Rolling Stones, but all of those artists have left since. 

As EMI’s market share is declining and they had to cut almost 50% of their work force, they are trying a new experiment on the Internet.  EMI also wants to launch an online music distribution service of their own.  Why?  Because they want to gather data on their customers.  At the end of the day, everyone wants to become a microcosm of Amazon.com.  They’ve been using the streaming/download digital music download model for years before even iTunes existed.

The leader behind EMI’s efforts for digital music downloads through their own service is Douglas Merrill.  Merill came to EMI as the President as the former CIO of Google.

EMI currently represents artists such as Lily Allen, The Beach Boys, Beastie Boys, The Beatles, Coldplay, The Chemical Brothers, Duran Duran, Daft Punk, Dem Franchize Boyz, Norah Jones, Lenny Kravitz, The Kooks, Moby, Liz Phair, Spice Girls, Switchfoot, Keith Urban, Robbie Williams, and Yellowcard.