Cooking Vinyl signs deal with YouTube rival MUZU is seen in this screengrab taken January 27, 2009. REUTERS/

LONDON (Reuters) - Cooking Vinyl, the label behind the Charlatans and The Prodigy, has signed a global licensing deal with MUZU.TV, a new music video website.

Cooking Vinyl said on Tuesday it had chosen to partner with Irish firm MUZU because it was purpose-built for the industry. Music labels are looking to develop their digital businesses as physical sales of CDs fall.

MUZU, which has also signed up EMI, Sony BMG and the Ministry of Sound, pays artists through advertising when their music is played. Users can either watch music videos on the MUZU site, on artist sites or embed them into their social networks.

“To date, we have resisted doing deals with a lot of online video platforms because we didn’t feel their offering fairly compensated our artists and had the right focus,” said Martin Goldschmidt, founder and managing director of Cooking Vinyl.

“MUZU.TV is different from other online video sites -- it was purpose-built for the music industry and we believe it holds great revenue potential.”

Reporting by Kate Holton, editing by Dan Lalor and Paul Casciato