Vevo, an online music video start-up backed by two major music labels and supported by YouTube's technology platform, is in talks with CBS Corp and NBC to license and develop shows for the Web, according to two people familiar with the talks.

The website Vevo is the music industry's answer to Hulu, the popular U.S.-based online service backed by NBC Universal, News Corp and Walt Disney Co.

Vevo, which is due for launch by December, is being designed to offer high-quality music videos and music-related programing. It will be separate from Google's YouTube, whose technology will be the framework for the new site. Currently, YouTube is the home to most music videos on the Web.

Vivendi's Universal Music Group, the world's largest music company and YouTube, first announced plans for the service in April. So far Vevo has signed one content and equity partnership deal with Sony Music Entertainment.

A person familiar with Vevo's plans said similar deals are on the table with Warner Music Group and EMI Group. An agreement with Warner will likely be delayed because of an ongoing dispute with YouTube over financial terms.

The partners intend for Vevo to move beyond simply being a website for music videos and artist interviews. They hope to develop original music-related content with experienced programing partners like CBS, NBC, ABC and Fox. Such programing could also potentially be aired on TV as well.

It could mean that Vevo would eventually be a competitor to Viacom Inc's MTV Networks empire of cable shows.


It is not yet clear if Vevo will require additional funding ahead of its launch, though the company has had talks with financial investors such as private equity partners who have shown an interest in backing the start-up, according to the person familiar with the plans.

Providence Equity Partners was one of Hulu's investors along with its content partners. It was also one of the private equity investors in Warner Music in 2004 when the music company became independent from Time Warner Inc.

Former Universal Music head of digital Rio Caraeff was appointed as Vevo chief executive earlier this summer.

Vevo's higher quality music videos will be expected to generate revenue by advertising in and around the music clips. The founders hope that by focusing on better quality videos and original content they can get higher advertising rates than currently available through YouTube's broader base.

The company has held talks with major advertisers and deals with at least four big brand names are expected to be ready in time for its debut later this year.

Caraeff and his team are currently recruiting around 40 staff from the online advertising sector to run the site.

(Reporting by Yinka Adegoke; Editing Bernard Orr)