While Warner Music Group Corp. (NYSE: WMG) withdraws from social music site Last.fm Ltd., Universal Music Group is further embracing the service. Universal has added its catalog of videos to Last.fm's on-demand streaming service and has agreed to share revenue from advertisements running alongside clips. The deal also includes a provision that Last.fm will highlight UMG's videos exclusively for one month after the agreement goes into effect, bringing clips from Jay-Z, Amy Winehouse, the Killers, Kanye West and others into view.
Warner, the first of the majors to cut a deal with Last.fm, pulled its songs from the site's on-demand service earlier this month, although it continues to allow its songs to be streamed through Last.fm's personalized radio service. A source with knowledge of the situation says Warner felt that Last.fm had failed to deliver promised ad revenue and is trying to renegotiate the terms of its agreement. While Warner has taken equity stakes in other companies that provide on-demand streaming music, such as Imeem Inc., Lala.com Inc. and the MySpace Music joint venture, the source says Last.fm will likely have to cough up more cash rather than equity to keep Warner's music on the site. CBS Corp. bought Last.fm for $280 million in May 2007.
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