Universal Music and YouTube are set to launch a premium music video and entertainment site after the pair agreed new content licensing terms. Vevo, which will launch in the coming months, marks a concerted effort by Google to boost ad revenues for its music content.
The ad-supported Vevo site will act as a music hub for Universal's full catalogue of professionally-produced music videos. Universal and YouTube will split ad revenues, although the site will be wholly owned by the label.
"We believe that at launch, Vevo will already have more traffic than any other music video site in the US and in the world," says Universal Music's CEO and chairman Doug Morris. "This traffic represents the most sought after demographic for advertisers, especially as advertising dollars continue their shift from old media to new.
"Vevo will expand the premium video marketplace, generate new revenue streams for content creators, and provide brand advertisers an unprecedented opportunity to get in front of a highly engaged audience," Morris adds.
With the new deal, Universal Music content will remain available on YouTube – including fan-created videos and all clips containing copyrighted music from the label. Following the launch of Vevo, all premium Universal videos, uploaded by the label itself, will appear on a new branded Vevo channel, in an effort to drive traffic to the Vevo.com domain.
Though Vevo will launch just with content from Universal, the label is reportedly in talks with the other major labels about including their content on the new site, potentially making it a more comprehensive music offering for both viewers and advertisers.
The news follows last week's deal between Disney and YouTube that allows the video site to host more ad-supported premium content. With rumours that the Google-owned video site is also in talks with Sony over a film deal, YouTube is upping the premium content on its site in an effort to lure new advertisers, previously put off by the unpredictable and user-generated content on the site. This is something Vevo effectively sidesteps.
Earlier this year Sony music also renewed licensing terms with YouTube, while EMI's contract is shortly up for renewal. Premium Warner content is no longer available on the site after talks broke down with YouTube in December.
StrategyEye's related categories: Online Video, Video Networks, Major Labels
StrategyEye's related companies: EMI Group, Universal Music Group, Sony Music, Warner Music Group, YouTube
