Sony Music Entertainment is joining Vevo, the music video joint venture formed by YouTube and Universal Music Group. Sony will provide backing for the project in the form of an undisclosed equity stake alongside access to its music catalogue.
Universal’s head of digital Rio Caraeff will head the company when it launches, with Universal retaining ownership. YouTube will receive a cut of the profits in return for providing the service’s platform.
?We share a common vision of offering music videos and other premium video content from some of the world's greatest artists in an attractive, clean and intuitive environment that appeals to fans and advertisers alike," says Sony Music Entertainment CEO Rolf Schmidt-Holz.
He adds that Vevo will attract some of the ?most desirable demographics on the web and develop new and innovative ways to monetise music video.?
With Sony on board, Vevo will have access to a much broader catalogue. The remaining two major labels, Warner and EMI, are yet to agree a deal with Vevo, but are said to be in negotiations to join up.
Music Ally analyst Steve Mayall says the Sony move is surprising as Vevo was initially presented as a Universal project rather than the open joint venture it is apparently turning into. He says previous attempts by labels to wrest control of content, notably MusicNet and pressplay, have fallen at the wayside in the past.
?Ultimately they just don’t work because consumers don’t identify artists with labels, they just identify artists,? he says.
The key problem for Vevo is YouTube itself, according to Mayall: ?Why wouldn’t you go to YouTube? If you want to go and see artists’ videos, they’re all there on YouTube already.?
Mayall says YouTube is likely to derive the most benefit from the deal by gaining advertisers who are loath to run their ads alongside the video platform’s user-generated content. This includes the millions of music videos on the video platform.
Vevo says it is still seeking ?additional strategic participation by third-party investors?.
StrategyEye's related categories: Video Networks, Major Labels
StrategyEye's related companies: Universal Music Group, Music Ally, Sony, YouTube
