Universal Pulls Music Videos From MTV.com as Talks Break Down

Vevo Controls Online Distribution Rights to Lady Gaga, and Wants to Dictate Terms

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NEW YORK (AdAge.com) -- MTV.com is going to have to do without Lady Gaga, Lil Wayne and Justin Bieber and all other Universal Music Group artists due to an impasse with Vevo, the joint venture that controls the online rights.

Lady Gaga
Lady Gaga
MTV's deal with UMG, the world's largest record label, expired at the end of July, and videos have started coming down over the past few days, according to execs close to the talks.

To renew those rights, MTV must negotiate with Vevo, a joint venture between UMG and Sony Music Group created last year to distribute and sell ads against music videos online.

Vevo controls online distribution for three of four major labels: UMG, Sony and EMI. MTV's deal with Sony expires in the fall; a deal with EMI expires soon after.

MTV just inked a distribution deal with the sole major outside of Vevo -- Warner Music Group -- that allows MTV to sell ads on music videos and split revenue with the label. Vevo sells its own ads, and according to MTV, was looking for onerous terms.

A UMG executive said Vevo is asking for standard syndication terms in the industry, and noted Vevo just inked distribution deals with AOL and CBS and is close to deals with Yahoo and Univision. Vevo videos are also distributed by YouTube, which is the joint-venture's largest source of viewers.

As a result of the impasse, Universal artists won't appear on MTV Networks sites MTV.com, VH1.com or CMT.com. An MTV spokesman said the network has had a nearly 30-year relationship with UMG. "During our recent discussions with Vevo, we were unable to reach a fair and equitable agreement for rights to stream UMG artists' video content," the company said, in a statement.

Launched late last year, Vevo is the No. 3 measured video site on the web, according to ComScore, with 43.7 million unique viewers in June. All of MTV Networks had 29.4 million unique viewers in June. Next month it will add Warner Music Group's traffic, which was 25.7 million unique viewers in June.

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