Universal Music Group, the world’s biggest music company, and Google’s YouTube, announced plans Thursday to launch a channel that they hope will become an ad-supported online destination for music videos.
Called Vevo, the channel will launch with content from UMG’s high-profile acts like Taylor Swift and Kanye West, though the plan is to eventually make deals with the other major labels. YouTube will host the videos, and UMG will provide the content, while both will split the advertising revenue.
The partnership was brokered by U2 rocker — and UMG artist — Bono, following a dinner in Paris with Universal Music Chairman and CEO Doug Morris, in which they discussed finding an economically viable way to feature music videos on the web.
Bono suggested that Morris meet with Google’s chief executive, Eric Schmidt — and he also emailed Schmidt, suggesting he meet with Morris. The two finally got together in New York. "I came back here in California [thinking]: Why don’t we think about a new approach?" Schmidt told the Los Angeles Times. "That then kicked off Doug’s vision."
The result is an attempt to basically mirror the success of Hulu, a joint venture of News Corp and NBC Universal that features movies and TV episodes and draws some 34 million monthly viewers, except aggregating music videos – already a highly successful staple of YouTube, but one that has been able to successfully monetize itself. By becoming, in effect the online equivalent of early MTV, it would better attract advertisers and sponsors.
At the base of the partnership is a hope to find new revenue sources for the ailing music industry, with CD sales in free-fall.
"This is the next step in taking the video, which is more important than just an audio stream, to the next level of monetizing it," Morris told the Times.