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.

Related Articles

• Universal Music and YouTube Partner for New Music Vide Website – March 7, 2009
• Download The Peoples String Foundation – Red Dress Woman in Black via Bittorrent – February 18, 2009
• New Florence And The Machine Video – Dog Days Are Over – March 29, 2010
• SpiralFrog Goes Under – March 23, 2009
• Qtrax Signs Sony BMG To Their Ad Supported Service – December 5, 2008

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.

Related Articles

• Qtrax Signs Sony BMG To Their Ad Supported Service – December 5, 2008
• SongBeat: The New Music Piracy Tool That Will End Up Closing Soon Enough! – December 2, 2008
• We7 Launches Out of Beta With New Design and Added Features – November 21, 2008
• Spotify Growing Fast – Product and Territory Expansion Slated – March 19, 2010
• Universal Music Group and Google Partner for Vevo – April 12, 2009

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.

Related Articles

• SpiralFrog Goes Under – March 23, 2009
• Universal Music Group and Google Partner for Vevo – April 12, 2009
• P2P Music Downloads Worth $69 billion. Is Digital Music Distribution Going Down The Toilet? – November 20, 2008
• Universal Music and YouTube Partner for New Music Vide Website – March 7, 2009
• SongBeat: The New Music Piracy Tool That Will End Up Closing Soon Enough! – December 2, 2008

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

Related Articles

• Universal Music Group and Google Partner for Vevo – April 12, 2009
• SpiralFrog Goes Under – March 23, 2009
• Universal Music and YouTube Partner for New Music Vide Website – March 7, 2009
• HMV To Launch Digital Music Download Store In The Next Two Weeks – July 16, 2010
• Tesco To Launch a Digital Music Locker Service – June 16, 2010

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!

Related Articles

• SpiralFrog Goes Under – March 23, 2009
• Universal Music Group and Google Partner for Vevo – April 12, 2009
• Nokia Announces Their “Comes With Music” Service will be Opening in Mexico, Italy and Sweden – March 11, 2009
• 45,000 People Downloaded The New u2 Album via Torrent Sites in 2 Weeks – March 9, 2009
• Tesco Has The New U2 Album for Only £3.97 – March 6, 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.

Related Articles

• Yahoo Music Is The Most Used Music Site in Japan, Ahead of Sony Connect – November 9, 2008
• Top 100 albums of the decade – November 19, 2009
• Hulu, Vevo, Spotify – Embattled EMI embraces new revenue streams – November 19, 2009
• Digital Music Store Focus – Amazon MP3 – October 5, 2009
• Bleep.com Music Store Launches New Version – January 22, 2009