DIGITAL NATIVE

Online Video Platform Launch of the Year

Vevo

Published on .

Web, iPad, net-connected TVs

The recording industry spent a decade watching pretty much all of their attempts to win in digital fail. Then came Vevo. The startup, backed by Universal Music Group and Sony Entertainment, was born from a brilliant business deal: YouTube agreed to power the service and wrap all videos from labels in the service (now including EMI) in the Vevo player. The labels gave the startup five-year global distribution rights -- and the exclusive right to sell ads against those videos.

The result is that in less than a year, Vevo is the No. 2 online video service to YouTube and is branching out from videos to original programming. MTV, meanwhile, is in the awkward position of having to negotiate with Vevo for online rights to artists like Lady Gaga and Justin Bieber. How dominant has Vevo become? Five of the top-10 YouTube videos of all time are from Vevo, including Mr. Bieber's "Baby," with more than 391 million views. If Vevo works, it will make advertising a bigger revenue stream for artists, which means less dependence on dwindling CD sales and digital downloads.

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