Music Video Site Vevo Is Like Hulu But With a Better Business Model

Last Updated Dec 10, 2009 3:08 PM EST

Though I can add Tuesday night's Vevo launch to the list of parties I did not get invited to, I have gotten to try out the new music video site, which is the result of a partnership among YouTube, Universal Music Group, Sony Music Publishing and Abu Dhabi Media Company and has content from those companies and more of the major labels. Here are some initial impressions:
  1. Though run by YouTube, the user experience is much like Hulu's, using the same letterbox-style display for each video, with big tabs at the top of the page for things like genres and artists, and thumbnail displays of popular videos and playlists below. The biggest differentiator between the two, pictured here, is the color palate.
  2. The advertising model is also strikingly similar, although let's admit there's not all that much ingenuity required to figure out how and where to run an online video ad. There are a lot of pre-roll commercials, from launch advertisers including AT&T, Colgate and McDonald's. These advertisers also are sometimes featured in banner ads surrounding the video.
  3. However, there's a huge difference in how effective this model will be for the content companies involved. Because Vevo is showing short content which isn't being monetized on TV, and is monetizing it in a similar manner to the full-length programming on Hulu, with a much higher ad-to-content ratio, it's a much better model than Hulu's. With little, if any cannibalization of the content, it's a much more straightforward way for content owners to make money. The irony is that, back when people actually bought music, the videos were the promotional component. Now they are the potential cash-cow for the industry. (The site also has other revenue streams in the works, including merchandising and ticket sales, per my bud David Kaplan at paidcontent.org.)
  4. Even though Google is part of the venture, the search sucks. Maybe from a technical perspective it finds what people typed into the search box, but here's an example of the experience you might have when searching on Vevo: I tried an old-time rock band, The Rolling Stones, and mostly got videos for "12 Stones." A search for U2 -- speaking of still not being able to find what I was looking for -- turned up a bunch of U2 videos -- and "Hey Ya" by OutKast (!). Upon further review, I think this is because an early Vevo adapter had posted a playlist that includes videos from OutKast and U2, but that was only apparent after drilling down. Presumably, if you're looking for content from a certain musician, that's what you want to see, not some dude's playlist.
It's hard to determine how Vevo will do. As I said, it's got a much better monetization model than a lot of other online video because of the short-form nature of the content. In addition, the content comes from known entertainment companies as opposed to the amateurs with peculiar fixations found on YouTube; advertisers will feel relatively safe on Vevo. (Not that there's never been a controversial music video.) On the other hand, as the modern day MTV, Vevo is a reminder of how much things have changed since the days when MTV was the hottest thing in media. Now, the hottest media toys are things we couldn't have imagined back then, like the iPhone and Twitter, which give us niche, customized media experiences. If Vevo can play to those characteristics, maybe it can succeed.

Previous coverage of online video at BNET Media:
  • Catharine Taylor

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