Music Ally

Vevo CEO Rio Caraeff says CPMs are creeping up to $20 for some of the video portal’s most lucrative advertising partnerships – compared to the $2 that he says was traditionally charged around online music videos.

Talking at Billboard’s Music & Money conference, he also said that Vevo sold 85% of its ad space last month, and now has an audience of 37 million people in the US and seven million in Canada. 20-30 million videos are being streamed every day, and while 90% of Vevo’s traffic is coming from YouTube, Caraeff says that’s not a problem. “People can drink from whatever faucet they want to. Ultimately we want the water to come to our well.”

Meanwhile, Vevo has started making 15-30 second video clips to promote emerging artists, sponsored by brands. It’s a sign that the site is looking beyond pure display ads to pull in the dollars from its advertising partners.

Universal Music Publishing Group is launching its own channel on music video portal Vevo, called Behind The Hit Songs.

Chairman and CEO David Renzer announced the news at MIDEM today, saying it’ll be a songwriters channel. “It’s not going to be just Universal writers, we’re going to open it up to the industry,” he said.

“We’ve already started to shoot various videos.” Videos? He cited one example of songwriter Glen Ballard talking about working with Michael Jackson and Quincy Jones.

“You almost feel like you’re in the studio with him and Quincy,” said Renzer. “We’ve shot about half a dozen of these now. We have a rev-share deal with Vevo, and we’re hoping to get a sponsor on board – so it might be Behind The Hit Songs sponsored by American Express.”

New figures from comScore show that music videos portal Vevo has made an impressive start. In December, it attracted 35.4 million unique visitors, vaulting it ahead of MySpace Music’s 33.1 million. And Vevo didn’t launch until the eighth of the month.

However, TechCrunch digs into the figures and claims that 92% of Vevo’s traffic came from the Vevo channel on YouTube, showing the distribution muscle of Google’s video site for the new music venture. “The interest and enthusiasm our users have shown has been both gratifying and inspiring,” says CEO Rio Caraeff.

“We are also proud to deliver such strong traffic results straight out of the gate to our content and marketing partners, which solidify their early belief in the Vevo vision.”

Remember Muziic? It used to be a PC application that let people build music playlists from YouTube videos, but just after Christmas it launched a website version.

One of the key selling points? The ability to also play videos from Vevo anywhere in the world – not just in North America – without seeing the accompanying ads. Vevo was quick to respond, emailing Muziic’s teenage founder David Nelson asking him to stop using Vevo’s content and trademark.

Soon after, Vevo removed its videos from YouTube’s API, ensuring that no third-party website could use them. Muziic is back to relying on pure YouTube videos for its music content, although the company has high hopes for its spin-off Facebook application, as well as the website.

Vevo, the joint venture between Google and Universal, is set to launch in the US on December 8. First announced in April of this year, the service will be a “premium online music video hub built for consumers, advertisers and content owners” featuring Universal music (and we expect ultimately other major label music) but making use of Google’s technology and the YouTube community. Back in April, Universal CEO Doug Morris said that “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.” In a few weeks we’ll find out whether or not he’s right.

What does soon-to-launch music video portal Vevo have in common with UK football club Manchester City? No, it’s not Craig Bellamy. Both are funded from UAE emirate Abu Dhabi.

Vevo has just taken an investment from the government-owned Abu Dhabi Media Company, which although undisclosed, apparently values the venture at $300 million. ADMC bought a stake from joint owners Universal Music Group and Sony Music.

All Things Digital suggests the decision to take investment from a non-music industry company is strategic, to allay anti-trust issues. ADMC, which is owned by the Abu Dhabi government, already has a deal with Hollywood studio Warner Brothers to finance movies and build a theme park.

We wondered whether UMG would have much luck signing rival major labels up to its VEVO video site… Well, they’ve now got Sony Music.

The major label has confirmed it will be part of the service – which is being powered by YouTube – when it launches later this year. Sony has taken an undisclosed equity stake in the venture. The Financial Times reports that VEVO is looking for outside investment from advertisers and brand-owners who may be interested in taking an equity stake too.

The article suggests that Warner Music and EMI are still mulling over their options, with online TV site Hulu a possible alternative. The latter is reported to be in negotiations with several labels to add their videos to its service.

Recently-announced premium music video site Vevo will appoint head of Universal’s digital music business Rio Caraeff to head its operation. Currently at the helm of UMG’s eLabs, Caraeff is apparently to be named Vevo president when the service launches later this year. (more…)

US online video site Hulu has so far focused on TV shows and movies, but a report on Bloomberg claims the company is now in talks with all four major labels to add music videos to its catalogue.

The article suggests the labels have been in discussions with Hulu since late last year, but that a sticking point – stop us if you’ve heard this one before – is how to split advertising revenue. The news follows the recent announcement of VEVO, a premium music videos site being launched by UMG and powered by Google.

The same Bloomberg piece suggests that the other major labels may be offered a stake in VEVO to persuade them to sign up. And indies? They don’t seem to be on the radar of any of these deals, although that may be more about journalists focusing on the Big Four when reporting them.

When Google and Universal Music Group announced their VEVO premium music videos site last week, we initially assumed it was a Google thing, and that UMG had signed up to it. Not so.

“VEVO will be run by Universal Music, but we are providing the technology and sales capabilities,” Google’s director of video partnerships Patrick Walker tells Music Ally. “Their aspirations are beyond their own content, but they will drive the business terms and relationships.”

This is a pretty important aspect of VEVO that may affect its chances of signing up other major and independent labels, who may be concerned about UMG having access to data on the consumers watching their videos. That said, US online TV portal Hulu has proved that this kind of approach can work, although it started as a joint venture between two studios – NBC Universal and News Corporation – rather than one.

However, if Google is powering VEVO for UMG, couldn’t it do the same for other major labels if they wanted to go it alone? “We’re always looking to do deals that make good business sense,” says Walker. “If a group comes to us with a smart and sustainable business model, we’ll look at it. We don’t do deals that are exclusive, and we always try to be a neutral provider of technology. So we are definitely open to proposals.”

Walker was talking as part of an interview in this week’s Music Ally Report, which was published today. For a free two-week trial of our premium service, which includes access to that and our archives of other reports, click here.