MUZU.TV, an Irish-based video Web site which has won plaudits from the music industry for the way it pays artists when their music is played online, has signed a deal with the world's largest label Universal.

MUZU.TV, which has also signed deals with EMI, Sony BMG, the Ministry of Sound and Cooking Vinyl, says it is purpose-built to pay 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 social networks.

On Tuesday MUZU announced it had signed a video licence to show videos in Britain and Ireland for Universal's global artist repertoire, including the likes of Amy Winehouse and U2. Universal is owned by Vivendi.

It also said on Tuesday it was powering video for all Sony Music artists on the popular Bebo social network and it is the official partner on the Michael Jackson site for Britain and Ireland.

MUZU has been welcomed by the music industry, which had previously criticized other sites such as YouTube for failing to properly compensate artists. The industry is also keen to develop their digital businesses as physical sales of CDs fall.