The rumours are true and Universal Music Group and Google have announced their joint venture, Vevo – a video site offering UMG’s music videos, with advertising revenues shared between the two.
The full press release is below for you to digest, and naturally we’ll have more analysis next week.
UNIVERSAL MUSIC GROUP AND YOUTUBE TO LAUNCH REVOLUTIONARY PREMIUM MUSIC AND VIDEO SERVICE
VEVO – UMG’s Premium Music Service Powered By YouTube To Launch In Coming Months
NEW YORK, NY and SAN BRUNO, CA, April 9, 2009 – Doug Morris, Chairman & Chief Executive Officer of Universal Music Group (UMG), the world’s leading music company and Eric Schmidt, Chairman of the Board & Chief Executive Officer of Google Inc., today announced that UMG and YouTube, a Google subsidiary, are working together to launch VEVO, a music and video entertainment service that will feature UMG’s premium video content.
In addition to VEVO, YouTube has renewed and extended its successful partnership with UMG that allows users to continue creating and watching user-generated videos containing UMG sound recordings and Universal Music Publishing Group’s compositions on YouTube through various territories around the world. The two companies will also share advertising revenue on YouTube and VEVO.
Launching later this year, VEVO will be a premium online music video hub built for consumers, advertisers and content owners that will blend UMG’s broad catalog of top artists and content with YouTube’s leading edge video technology and user community. YouTube will provide the technology infrastructure that will power VEVO and host UMG’s extensive library of professionally-created music videos on the new site. On YouTube, this content will be exclusively available through VEVO.com and a new VEVO channel through a special VEVO branded embedded player.
“VEVO will bring the most compelling premium music video content and services to the world’s single largest online video audience,” stated Mr. Morris. “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. And this traffic represents the most sought after demographic for advertisers, especially as advertising dollars continue their shift from old media to new. VEVO will be uniquely positioned to monetize this opportunity and a host of others as we grow it to become “the” destination for premium music video content online. For music lovers who want the best in music videos, the VEVO experience will be second to none. At the same time, 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. We couldn’t be more excited about the huge potential we see in the VEVO service.”
“Technology has allowed fans to discover music in endless ways while creating new business opportunities for artists and labels alike,” said Mr. Schmidt. “At Google, we are committed to promoting greater innovation and choice and are thrilled to be working with UMG in what will surely be an exciting new service for consumers, advertisers, content creators and the music industry at large.”
At launch, people will be able to access UMG’s entire catalog of premium music video content, including professionally-created and full-length videos on VEVO, as well as artist-generated content and user-generated content hosted on YouTube. VEVO will also serve as a syndication platform, expanding the reach of the VEVO brand. This innovative platform is aimed at providing consumers the very best in digital music content while further extending UMG’s lead in the direct-to-consumer market.
Presently, UMG’s YouTube video channel has more than 3.5 billion views, making the UMG channel the most watched on YouTube.
There have been a lot of reports over the weekend about the demise of SpiralFrog. SpiralFrog was an ad supported music streaming and download service that never really took off.
Having raised as much as $12 million in VC and debt funding, the company made a splash in August 2006 (after 2 years in operations) when Universal Music made their entire music catalog available for free download through SpiralFrog, joined by EMI a month after. About a year after, SpiralFrog started handing out private beta invitations (what took them so long?)
Attorneys representing defunct music service SpiralFrog have notified investors not to expect any returns. Whatever money comes from liquidating assets will go to a group that loaned the company an “amount exceeding $34 million.”
Is this going to be the start of more ad supported music download and streaming services moving towards the deadpool? I can see Qtrax is going to now have a lot of trouble is this economic environment and Im sure they will be the next to be closing.
Qtrax has released a press release this morning stating that they have finally signed Sony BMG to their catalogue.
Qtrax is a legal P2P downloading service. In January 2008, Qtrax was overeager to announce it’s launch during the Midem conference and misrepresented ongoing negotiations and expired deals with major recording labels as being signed deals.
Qtrax is a very interesting service that has never really lived up to expectations. I’m keen to see how the service grows and if they can actually deliver decent royalty rates for the content providers. Here at RouteNote we are always looking for the next site to take off and Qtrax is definitely in the mix.
In the last year or so it has been tough times for the major record labels. The majors have not really been moving into the digital as fast as they should, whilst at the same time not understanding the digital business models.
Whilst this still remains the case Universal have released their lastest quarters results, and they seem very surprising to me.
- $3.97 billion revenue for first 3Q’s of ’08
- + 3.5% without currency fluctuations
- + 33% for digital sales which “”more than offset” lower CD sales
- Earnings 21.8% to $516M before deduction of interest, tax and amortization
- Net is lower due to restructuring costs
- Full press release
After spending months in public beta and lots of changes to the ad supported music service, We7 is about to launch out of beta with a bang.
We7 have launched with a “Big Listen” campaign. This new service has some great new features including Free on-demand, unlimited access to full tracks and albums, “Search, Click & Play”, A ‘Celestial Jukebox’ with several million track, ‘Play Anywhere’ – a link and play system for blogs and websites, Users can create playlists, share with friends and buy mp3′s, Payments to rights owners and artists.
The first thing you will notice with the new site is that they have a completely new design. Other new additions include a Magazine, Blog and a much improved list of advertisers. Im sure we will be hearing a lot more from We7 in 2009!
A lot of people are talking about how a weak economy is affecting advertising revenues and from my experiences this is definitely the case. However, because advertising is suffering some journalists also expect that to have an effect on ad-supported music startups, such as Spiral Frog.This is definitely not the case, mainly because they provide royalties as a percentage of their revenues.
For Spiral Frog that have now reached a new milestone in terms of their catalog size, over three million songs are now available through their service.Music videos for download also increased to almost 5000 and registered users have grown to 2.3 million according to the company.
SprialFrog believes this is the largest total number of registered users on any legal, free music download site, but offered no details as to how active the users are.
According to Joe Mohen, founder and chairman, “With the current economic turmoil and the potential threat of a recession looming, the offering of free music is very attractive to budget conscious consumers.” SpiralFrog’s biggest competition isn’t paid downloads, however, it’s free pirated mp3′s via P2P. It is also unclear how the economic downturn will effect the advertising revenue that all ad-supported sites require.
BBC Worldwide is working on an ad-supported music service that would offer free streaming or paid downloads of songs and videos from the BBC archives, including live performances from its “Top of the Pops” and “Live Lounge” on Radio 1, New Media Age reported.
The service is expected to launch next year with at least 1,000 tracks, and the BBC is reportedly negotiating rights with record labels including EMI.
Ads on the streaming content would comprise pre-roll and display ads sold by the BBC and served by DoubleClick.
