Finally this hour, YouTube, the number one destination if you're looking for home videos of cute cats, clever babies and lip-synching teenagers, is also becoming important to the music industry.

NPR's Laura Sydell reports that the industry is looking at YouTube as the MTV of the digital generation.

LAURA SYDELL: In the old days, new bands created buzz by playing clubs and getting on local radio.

Mr. JEFF DODES (Senior Vice President, Marketing and Digital Media, Zomba Label Group/Sony Music): Your ideal artist you're looking to sign is an artist who's created a story and a buzz on themselves.

SYDELL: Jeff Dodes heads digital media for a division of Sony Music. Dodes says his label often gauges a new band's popularity by looking on YouTube. That's where they found the GS Boyz, that's Boyz with a Z.

(Soundbite of song, "Stanky Leg")

GS Boyz (Rap Band): (Singing) (Unintelligible)

SYDELL: The "Stanky Leg" is a song about a dance. GS Boyz show you how to do it. You stick your leg out, twist it, drop it, hold it still, snap your fingers.

(Soundbite of song, "The Stanky Leg")

GS Boyz: (Singing) Snap your fingers in the air and shake your micros too. Now you can lean with it and you can drop with it.

SYDELL: Dodes says one of the talent scouts saw the video.

Mr. DODES: And just saw this explosion of activity on YouTube in terms of views, and, you know, kids putting up their own videos of them doing the dance, then, you know, all kinds of things.

SYDELL: All those YouTube videos convinced them to sign the GS Boyz. And Dodes says when the GS Boyz make their record for the big label, he'll take them right back to YouTube to promote it.

There are a lot of tricks the record companies have worked out to make it seemed as if you randomly stumbled upon their professional videos.

Jeremy Maciak of Vagrant Records points out a video by their band A Cursive Memory. Maciak says it's a pretty simple production.

Mr. JEREMY MACIAK (Marketing Department, Vagrant Records): Basically, the band jumping in front of paparazzi and behind velvet ropes all throughout Hollywood with a boom box on their shoulder, singing their song, which is called "Everything."

(Soundbite of song, "Everything")

Mr. COLIN BAYLEN (Vocalist, A Cursive Memory): (Singing) I can never find a way or the right thing to say. I guess I just didn't know how. You see, the longer that we wait, the more time things can take. I guess we'll have to spell it out.

SYDELL: The video is filled with shots of well-known celebrities, and they're all named in the video's tags.

Mr. MACIAK: What we did is highlight some of the celebrity names that come up very highly in Google and YouTube searches on a daily basis and got a lot of great exposure for the video.

SYDELL: The video got hundreds of thousands of views but not necessarily because people were looking for the song.

Music publishing industry executive Eric Beall isn't so sure that all that work to get videos seen on YouTube is worth the investment for the labels.

Mr. ERIC BEALL (Vice President, A&R, Sony Music Publishing): The promotional value of YouTube may be somewhat overstated. We've heard from a lot of these Internet-based companies that they're providing this great promotional vehicle for the music industry, and yet the music industry sales are plummeting. So at some point, you have to say, well, promoting for what?

SYDELL: And music videos will be on YouTube no matter what. It's no secret that the site is a hotbed of copyright violations, and those millions of unauthorized music videos don't make YouTube's relationship with the record industry very easy.

Warner Records officially pulled all their music off YouTube in the U.S., but it took me 20 seconds to find one of their acts, Aretha Franklin.

(Soundbite of song "(You Make Me Feel Like) a Natural Woman")

(Soundbite of applause)

Ms. ARETHA FRANKLIN (Singer): (Singing) Looking out on the morning rain, I used to feel so uninspired.

SYDELL: YouTube says it wants to cooperate with the labels. After all, analysts say YouTube still isn't making money for its parent company Google. So they'd like to find a way for everyone to make a profit. The site is experimenting with moneymaking ideas, says YouTube's Chris Maxcy, a product development director. Now, when you're watching a video, you can buy the music by clicking through to iTunes or Amazon.

Maxcy says YouTube also has this technology that will actually zero in on which parts of a video get the most views. So if people keep replaying the first half of the video where, say, Aretha twirls around, well...

Mr. CHRIS MAXCY (Product Development Director, YouTube): If you're a video producer, you can say, okay, well, that particular dance move or that particular part of the song is obviously more popular. So we need to highlight that more, or this wasn't popular, so let's take it out, right?

SYDELL: The same technology also helps a band plan its tour. So if there are lots of people who watched the video living in Sacramento, then the band can make sure to book a show there.

Online music is an especially volatile market: The music industry has been struggling for the last decade to make it profitable. MySpace once seemed promising, but its power is on the wane. So YouTube and the industry may have a limited window to try and make YouTube's popularity into something that's actually profitable.

Laura Sydell, NPR News, San Francisco.

SIEGEL: And you can watch videos of lots of people doing the Stanky Leg at

(Soundbite of music)


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