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article imageOp-Ed: In period of streaming upheaval, Vevo shows intrinsic value

By Lidya Patal     Dec 20, 2014 in Music
It's been an interesting quarter for streaming music. Platforms are growing, merging and partnering. Valuations are shooting up, plummeting and veering sideways. One company, Vevo, just keeps growing, despite losing its CEO and facing stiffer competition.
The final months of 2014 have been marked by a few major events in the world of streaming music. Apple set things off in August, when they finalized the purchase of Beats and acquired the burgeoning streaming platform Beats Music in the process. SoundCloud, who reigns supreme in the number of unique visitors it receives every month, came under fire from the major labels for copyright violations, then announced it would create new revenue streams through advertising and a premium subscription tier. YouTube confirmed that it would launch a elite tier of its own with YouTube Music Key.
Spotify, the hipster darling of streaming music, was forced into soul searching mode when uber-pop star Taylor Swift pulled her entire catalog from the site, citing what she called Spotify’s unfair treatment and payment of artists. The move set off a shockwave through the music industry, and nearly everyone had an opinion on the matter.
While Spotify struggled to shake it off, another new-music company moved in and helped itself to the blank space. Vevo, the popular music video site formed by major labels Universal Music Group and Sony Music Entertainment, saw its views explode after the Spotify removal. The desktop site welcomed 10 million more monthly desktop users, bringing the total viewership there to 52 million, in the month of November. During that period Vevo’s mobile platform fared even better: Viewership was up 136%, according to the Wall Street Journal, to 4.3 billion views worldwide. The most popular videos for songs from Swift’s new album, 1989, have racked up hundreds of millions of views in just a few weeks.
Vevo’s business model is convoluted, owing to the fact it is owned by the majors and heavily tied to YouTube, and what’s left of advertising revenue trickles down through the records labels and then to the artists. It appears that by this logic, Swift may also have wanted to pull her videos, of which there are 80 on the Vevo site, much like she yanked her songs from Spotify. But, as the WSJ points out, removing those songs would mean alienating current and future fans who find Swift through YouTube.
“If you’re an artist, it’s challenging to pull yourself off the largest content discovery engine in the world,” Peter Csathy, chief executive of Manatt Digital Media, told the paper. “That’s very different than something that is audio only and has a fraction of [YouTube's] distribution.”
However, Vevo is not immune to the whims of the streaming market. Vevo’s best friend in the industry, YouTube, could become its worst enemy as the Music Key service threatens to eat into Vevo market share. Furthermore, CEO Rio Caraeff will step down at the end of the year, a replacement has not been announced.
Quietly, Vevo has been making arrangements to diversify beyond YouTube. Earlier this fall, Vevo announced partnerships with Pinterest and Vadio, a company that works to incorporate video into traditional streaming services like Pandora. In December, a startup platform led by former Hulu CEO Jason Kilar called Vessel launched with the intention to take on YouTube by offering a subscription tier that promises “early-access videos,” meaning those who pay can see videos 72 hours before non-paying customers.
An early partner of Vessel’s subscription tier? Vevo.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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