By the end of 2012, Vevo CEO Rio Caraeff expects to have as many
viewers off of YouTube in the U.S. as on YouTube, largely thanks to
Facebook. "The activity on Facebook is our greatest chance to get
to 50% of view off of YouTube," he said in an interview.
Another bonus: While Vevo shares revenue with its distribution
partners, such as YouTube and MTV , it doesn't share ad revenue
Music videos were YouTube's most popular genre before Vevo
launched in 2009, and YouTube continues to be Vevo's key
distribution partner, responsible for 3.2 billion views a month
worldwide. But growth is coming faster outside of YouTube. Indeed,
YouTube's U.S. ComScore numbers have been flat since last fall and
dropped significantly to 16.7 billion in February from 18.6 billion
U.S. views in January.
Vevo's views on YouTube have also been falling since last fall
-- to 697 million in February from 871.6 million in November. Mr.
Caraeff said he believes the decline is a result of YouTube's
reorganization into "channels," which designed to make viewing a
more TV-like experience on YouTube.
The strategy is meant to get people to
watch longer-form videos on YouTube which could, theoretically cut
down on the number of views. "There are always fluctuations in
views based on things like seasonality, device usage, flow of
content and tweaks to how we suggest videos," YouTube said, in a
Running a business entirely dependent on another company is a
tough position to be in. Just ask Zynga, the social-game marketer
that is trying to establish itself outside of Facebook. Then
there's the fact that Vevo's distribution deal with YouTube comes
up later this year. "Any business strives for balance -- you don't
want to have all of your eggs in one basket," Mr. Caraeff said.
"You don't want all your traffic consolidated in one place."
Vevo says it now has 15 million mobile users, including iPad and
mobile phone users, and says its Xbox app is a "top-five"
application on Xbox, though Microsoft hasn't
disclosed user metrics. Vevo also relaunched its own website,
designed to keep viewers there longer.
Vevo, a joint venture between Universal Music Group and Sony Music Entertainment, launched as
an effort to make ad dollars a bigger revenue stream for the music
labels and to help bring brand dollars to YouTube.
Vevo has first right to sell ads into YouTube and elsewhere. If
an ad goes unfilled, then a distribution partner can sell the
advertising and shares revenue with Vevo. The lone hold-out is
Warner Music Group.
Music and music-related videos are among the priciest categories
of content on YouTube. A sales document obtained by Ad Age prices
the music "category" on YouTube at $62.5 million for the year,
including an exclusive on newly launched music-related YouTube
But Vevo is out to prove its more than YouTube, and more than
just music videos, for that matter. The company already airs
music-related web series such as "Live on Letterman" and "Sylized."
The company is expected to unveil a slate of originals at its
upfront presentation later this month.