Vevo Music Service

The much awaited online video channel for Universal Music has taken further steps forward. This video channel will be a partnership between YouTube and Universal Music and will live at vevo.com.

Universal Music currently has the highest numbers of viewers for a particular YouTube channel. That’s great for Universal, but also a bit of a problem. YouTube is essentially a middleman. Universal is leaving a lot of revenue on the table as well as very valuable user data.

The idea behind Vevo will be to create a higher-end video experience. The page will not be laden with flashy advertising, but instead will include just a few ads per page. Universal’s hope is that these ads will sell at higher rates.

YouTube and Universal will split the revenues 50/50. It is unknown at this time whether or not users will be able to embed these videos into blogs or websites, in the way that YouTube users can do now. Vevo will also be a channel within YouTube so as not to lose the users only searching in YouTube.

This is a great idea by Universal to capture more user data and gain more revenue, but the question is if it will work. I go to iTunes because I know that 95% of the songs I am looking for will be there. I don’t go to a music site that only has 1,000 songs available. Same thing with videos. I may want to watch a video by a Universal artist and then one by a EMI artist. I don’t want to first go to Vevo, then go to YouTube. I would rather be in YouTube the whole time.

And what is YouTube’s motivation? They may receive higher advertising money for going after more exclusive advertising money, but they are also promoting people to go from the YouTube site. Maybe YouTube is viewing this as an education experience and something that could be used in many different ways. Almost a franchising out of the YouTube brand.

I’ll continue to follow this. Vevo is expected to launch in full by the end of 2009.

Stay tuned,
Erik
erikrostad.com