Google, Universal to Launch Music Hub 'Vevo'
Google confirmed to Wired.com Thursday that all of Universal Music Group's video assets (music videos, interviews, concert footage and possibly Kyte-style backstage video) will live on Vevo, and that YouTube — and eventually, AOL, MTV and Yahoo — will embed Universal's videos from Vevo rather than licensing the content directly from the labels.
Although terms of the deal were not disclosed, Google's licensing worries with Universal are over. The label will be satisfied with its share of revenue from Vevo, YouTube and wherever else these videos end up — plus the control it will have over the Vevo service. In the end, this is another in a string of deals in which major labels have sued a social media network, settled, licensed, then gained equity in the service (imeem, MySpace and now YouTube).
"Vevo will bring the most compelling premium music video content and services to the world's single largest online video audience," Universal Music Group chief Doug Morris said in a statement. "We believe that at launch, Vevo will already have more traffic than any other music video site in the United States and in the world.
Unlike MySpace Music Vevo will not be a joint venture between Google and Universal, Google told Wired.com. The site will be wholly owned by Universal, the largest record label in the world, whose YouTube channel has more views than any other in the world (3.5 billion). Google will run all technology-related aspects of the service.
"Universal owns the site, but Google/YouTube is providing the technology," said a Google spokeswoman by e-mail. "We will be sharing revenue with Universal on both Vevo and on YouTube. Other labels could join Vevo; they are in talks currently."
"This traffic represents the most sought-after demographic for advertisers, especially as advertising dollars continue their shift from old media to new," added Morris. "Vevo will be uniquely positioned to monetize this opportunity and a host of others as we grow it to become 'the' destination for premium music video content online."
At its current ad rates, Google can't afford some of the majors' licensing demands. Warner removed its videos from YouTube in the United States, and in the United Kingdom and Germany, all major label music videos have been removed from YouTube.
The purpose behind Vevo is to sell advertising at higher rates than YouTube does now. If that means loads of overlays, pre-roll and post-roll advertising, users might revolt.
On the other hand, there could soon be no other game in town, at least as far as some of these videos go. If the rest of the majors join, Vevo could become "the" (as in, "the only") place on the web that can legally play or allow other sites to embed this desirable content. It could end up powering every licensed service you can access.
It's also worth noting that a potential deal between all the majors to join Vevo could threaten the likes of Muziic and Songza — believed to have been acquired by Amie Street — and others that deliver music from YouTube, unless Google and the labels don't mind them using Vevo instead.