Google-owned YouTube and the world's largest music recording company Universal Music Group are reportedly discussing collaborating on a premium music video website.
The New York Times on Thursday cited unnamed sources as saying that talks between the companies are "advanced" but still in flux.
Google has been striving for ways to make money on hugely-popular YouTube while avoiding alienating notoriously transient Internet users and assuring film and music studios that video copyrights are being respected.
Neither YouTube nor UMG, owned by France-based Vivendi, would officially comment on reports of talks that have appeared this week in the Times, Wall Street Journal and several other US news publications.
Music videos are extremely popular at YouTube and major labels have reportedly been seeking to renegotiate licensing deals inked in 2006 and 2007 in bids for better terms.
Agreements in place assure recording labels small fees when videos are watched and cuts of advertising revenue generated on the Web pages.
Sony Music Entertainment reached a new agreement with YouTube this year but other labels continue to negotiate with the video-sharing site.
The sides are divided regarding "how to compensate the music industry for the use of their music in things which are promotional," Google chief executive Eric Schmidt said at an investor conference this week.
A licensing arrangement UMG has with YouTube is reportedly set to expire at the end of March. Music videos on the UMG channel at YouTube have received billions of views.
(c) 2009 AFP
Explore further: Britain's UKIP issues online rules after gaffes