Amid the launch party of YouTube (Google), Sony and Universal’s 300 million dollar music video premium content site, Vevo, Eric Schmidt (CEO of Google) was overheard saying, “Vevo will “revolutionize the music industry by finally allowing it to make money online.” Now, while I have been waiting some time for a Hulu like solution to the music industry, the revenue models for the new network are flawed in that they only put money back into the pockets of major acts, leaving smaller, less established artists still in the cold. As expected of a Google/YouTube property, the revenue model for Vevo is advertising, merchandising and ticket sales. With the primary focus on rich video content from Sony and Universal, and hailed by insiders like Universal CEO Doug Morris as an “MTV on steroids, Vevo will serve content mostly from major artists and WMG has yet to add its content to the project, so it feels “light.” But I expect Warner will follow suit and we can already see Vevo is hit hard with traffic evidenced by its bugginess last night. I believe Sheryl Crow said it best, “Nothing will ‘save’ the music business, but every little thing helps. And anything that puts money in artists’ hands for the work they do is a good thing.” And that’s exactly what Vevo is, something that is helping but not the great white hope that the industry needs. Labels are still losing money while major artists’ income grows as more and more of their revenue comes from ancillary sources, labels can’t touch like merchandising and live shows. Last night served as a cool reminder that the industry is struggling but still alive and actively seeking new revenue streams while beginning to embrace the freemium content model. I wish Vevo luck!
“What we’re really doing is taking back control of everything…this is really like MTV on steroids, Universal CEO Doug Morris told CNet. We’re starting with that kind of audience. But now we’re in control of it. We don’t have to go through a middleman anymore.”
As Music Industry Struggles, Artist Income Grows
What Vevo means for the Premium Content Trend
@ Vevo Launch: Google’s Schmidt: The Music Industry Will Finally Make Money Selling Music Online
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