The notion that music videos service Vevo is shopping around for a buyer isn’t news in itself. In April, Hollywood studio DreamWorks Animation was reported to have submitted a bid – although it wasn’t clear whether it was for a minority stake or a controlling interest in the company.
Later that month, a separate report claimed that Vevo had hired Goldman Sachs to explore a sale, citing DreamWorks, Liberty Media and AT&T with investment firm The Chernin Group as potential buyers.
In that sense, a new report by technology site The Information is reiterating past rumours: it claims that Vevo “is for sale: the company and its bankers have begun taking meetings with a veritable who’s who of media and tech companies that have signaled they could be buyers”.
The report also suggests that this represents a failure for a “secret effort” by Vevo to stay independent, offering “a stark lesson in the pitfalls of certain types of joint ventures and the collective decision-making that they require”. Oh, and it claims that Vevo is likely to generate around $350m of revenue in 2014, with Business Insider adding that this could mean a sale price of around $1bn.
What would a buyer be getting? Vevo is certainly popular, even if its success remains heavily tied to its distribution through YouTube. Vevo generated 55bn video views globally in 2013, up 33% year-on-year.
It attracted 243m unique viewers worldwide, with just over 30% of its views happening on smartphones, tablets and connected TVs – although in April, CEO Rio Careff updated those figures to nearly 6bn monthly views and 65% of them happening on mobile devices.
The company is the biggest multi-channel network (MCN) on YouTube – in April, it accounted for 22 of the 100 most popular YouTube channels.
Now the speculation about Vevo’s ultimate owner will roll. Besides the firms named in previous rumours, expect Google (already a stakeholder), Apple, Facebook and Twitter to be in the frame – the latter is already thought to be eyeing various digital music services as potential acquisitions.
But thoughts of a Vevo sale have sparked our curiosity about Universal Music too: it’s increasingly possible that UMG will reap windfalls from its stakes in Beats, Vevo and (if it IPOs this year) Spotify in 2014. Rewarding investors aside, it’s intriguing to wonder how the world’s largest music label group might invest its tech profits in 2015 and beyond.
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