Music videos have been an important part of YouTube for a good while now, being amongst the most-watched videos on the site. But money, or the lack of it, was starting to get in the way of music videos being shared on the site. Enter VEVO, a new online hub purely for music videos.
A Long Time Coming
It was over a month ago that news of VEVO first leaked but it’s now official. YouTube (or Google if you’d prefer) and Universal Music are teaming up to create a new site intended solely as the place to watch music videos.
This has actually been a long time coming. The original revenue-sharing deals signed by the major record labels back in 2006 and 2007 have or are coming to an end. Now that they have seen quite how popular and traffic-generating music videos can be they want a better deal than the few-cents-per-play they were rumored to have been getting.
The Back Story
The Warner Music Group removed all its videos from the site just before Christmas. And soon after came talk of a new Hulu-like music video site owned and run by the big four of Warners, Sony, EMI, and Universal.
Then in early March there were reports of a new music video site being discussed between YouTube and the record labels. These reports have now been proved accurate as YouTube and Universal jointly announced the existence and nature of VEVO (all capitals it seems).
Little is yet known about the details of the site. Certainly neither side seemed willing to discuss the finer points of revenue-sharing and advertising. What is known is the name, the fact that the two companies will split advertising revenues, the fact that VEVO will be both an external site separate from YouTube but also a channel in its own right, and that the other record labels have been invited to discuss becoming part of the venture.
In essence this deal means that YouTube will provide the platform and Universal will provide the content. It sounds simple and probably is but could be a masterstroke at generating much-needed revenue for both sides and creating a must-visit online video destination.
For me, getting the other three major record labels on board is an absolute must. While VEVO will likely do perfectly well with just content from Universal, content from all four of the majors would really see it flourish. Warners is likely to be the last on board due to the ongoing row between it and YouTube.
A Lesson To Learn
One particularly interesting statement by Doug Morris, Chairman and CEO of Universal is that his company has gone from losing $70 million a year producing music videos for promotional reasons to making a similar amount from them. This proves music videos are big business in their own right rather than being just a means to an end.
Maybe the likes of Pete Waterman and the artists such as Bono, Radiohead, and Billy Bragg backing the PRS’s stance on YouTube should bear this in mind before threatening to take their ball and go home.
[Via The New York Times]
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