June 9, 2009

Why VeVo Could Become The Hulu Of Music

Universal Music has apparently seduced a cortortium of indie labels, A2IM, to join its video site Vevo. That follows last week’s news that Sony (NYSE: SNE) Music Entertainment has also signed up for VeVo, which Universal is launching with help from YouTube, the Google (NSDQ: GOOG) video site.

Assuming it doesn’t run into some unforeseen obstacle, VeVo could easily become a mainstream digital platform for the struggling music industry, much like Hulu has become for the TV industry.

—The labels will probably work together better this time, providing consumers with a robust, complete content offering. The labels likely learned their lesson from the failure of digital music download services launched in the early 2000s, including pressplay (Sony and Universal) and a venture powered by MusicNet (EMI and BMG).

Consumers rejected those services for their complicated licensing procedures and lack of choice in the acts offered for sale. This time around, it looks like the labels are ready to be more collaborative—a release announcing Sony’s participation said it would include a broad array of its artists on the site.

—Demand for digital music videos is strong, and different types of programming could increase users’ appetites. Four of the top-five professional channels on YouTube are music related—Universal Music, Sony Music, Britney TV and Hollywood Records.

So there is no question that people are watching and listening to a lot of music online. Most of the videos on these channels are fairly basic; Universal has said it plans to complement its usual offerings with exclusive interviews, reality programming and exclusive performances.

—Advertisers will likely embrace the service. Many video sites are evolving to try to meet advertiser interest in professional content. YouTube recently started streaming professional TV and movies, while competitor Metacafe, responding to advertiser feedback, added more professional content and organized it in hubs. Music reaches an elusive, young demographic, which, of course, is attractive to advertisers. One caveat:

As of now, it appears that Universal Music Group will be selling the ads for VeVo, and it remains whether people steeped in promoting records can also sell premium ad packages.

Source: http://www.paidcontent.org/entry/419-why-vevo-may-be-the-hulu-of-music/

Tags: Vevo, hulu, digital music, universal music group, youtube, google, yahoo, sony music entertainment, metacafe, Hollywood records, A2IM, musicnet, EMI, BMG, Global IT News Blogspot,

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