The launch of the YouTube Music subscription service has sparked questions about what it all means for Vevo, which distributes music videos to YouTube while also running its own apps and website.
Today, the company has answered that question: it will “phase out” its owned-and-operated mobile apps and site, and move forward as a pure distributor of music videos (and related content) and advertising seller for that material.
“At Vevo, our objective is to grow the commercial and promotional value of music videos, fostering deep connections between artists and fans. To be most effective in achieving those goals, we will phase out elements of our owned and operated platforms,” announced the company this afternoon.
A spokesperson explained to Music Ally that the consumer-facing website and owned-and-operated mobile apps will be shutting down, although Vevo will continue to have a corporate web presence.
It will launch a playlist tool for users to migrate their Vevo playlists across to YouTube, and will continue to support “select” over-the-top (OTT) Vevo TV apps, also.
“Going forward, Vevo will remain focused on engaging the biggest audiences and pursuing growth opportunities. Our catalog of premium music videos and original content will continue to reach a growing audience on YouTube and we are exploring ways to work with additional platforms to further expand access to Vevo’s content,” continued the announcement.
This hints at a wider opportunity for Vevo, as its existing distribution deal with YouTube comes up for renewal this year. Facebook is an obvious potential partner for Vevo’s catalogue, as its music ambitions expand, but Snapchat, Spotify and other platforms could also come into play.
Finding more baskets to put Vevo’s eggs in will be important, because as things stand the company is at the mercy of YouTube’s product strategy.
For example, in January YouTube announced that it would be migrating subscribers to artists’ Vevo-branded YouTube channels to its new ‘Official Artist Channels’, although the Vevo channels would still be accessible through search.
“We will continue to be the primary seller of Vevo-specific advertising on all distribution platforms – including the sponsorship of video premieres. Vevo offers unique selling propositions for buyers to purchase National, Local and Multi-Cultural audiences at scale, in brand-safe environments, with guaranteed reach and all of the addressability of IP-delivered inventory,” continued Vevo in its announcement today.
“Vevo will invest in original content including our flagship dscvr and LIFT emerging artist programs, as well as new formats that we plan to roll out shortly.”
Earlier this year, Vevo said that its revenues grew by 30% to $650m in 2017, helping it to break even for that year. The company said that it averaged 25bn monthly views for its catalogue – so around 300bn for 2017 as a whole.
Late in 2017, Vevo’s CEO Erik Huggers announced that he was stepping down, having earlier in the year admitted that the company was putting its ambitions to launch an owned-and-operated paid subscription service on hold.
More recently, Vevo’s CTO Alex Nunes also left the company, as it announced a round of layoffs in its product and engineering teams – which was clearly a precursor to the shift away from owned-and-operated apps towards a pure distribution and advertising model.
With today’s announcement out of the way, attention will now focus on the renewal of Vevo’s distribution deal with YouTube, as well as its hunt for other partners. The company is optimistic.
“Connecting artists to new audiences, while helping tell their stories, and growing an advertising-based revenue stream that benefits all of our partners, are key considerations that drive how we develop and adapt our business,” it said today. “Belief in the power of the music videos will always remain at Vevo’s core.”
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